Medical System With Hospitals in 4 States Files for Bankruptcy

Prospect Medical Holdings has 16 hospitals in California, Connecticut, Pennsylvania, and Rhode Island that serve 2,500 people daily and employ about 12,500.

A person arrives at the U.S. District Bankruptcy Court for the Southern District of New York in Manhattan on Jan. 9, 2020. Brendan McDermid/Reuters

California-based Prospect Medical Holdings Inc. filed for bankruptcy after being burdened by rising costs, declining revenues, and a precarious liquidity position.

The company filed for a Chapter 11 reorganization in the U.S. Bankruptcy Court for the Northern District of Texas on Jan. 11. Prospect estimated that it has assets of $1 billion to $10 billion along with liabilities of $1 billion to $10 billion, with more than 100,000 creditors.