😷New Chapter 11 Bankruptcy - Prospect Medical Holdings Inc.😷

An early candidate for 2025 Dumpster Fire of the Year.

Back on January 11, 2025, SoCal-based and formerly-Leonard Green & Partners, L.P. (“LGP”)-owned* Prospect Medical Holdings, Inc. (“PMH”) and 66 of its direct and indirect subsidiaries (collectively and together with PMH, the “debtors” and together with their non-debtor affiliates, the “company”) filed chapter 11 bankruptcy cases in the Northern District of Texas (Judge Jernigan), with an embarrassingly low ~$3.3mm of cash on hand against an average of One-Hundred-and-Twenty-One Million dollars in payroll costs per month. That’s just PAYROLL. This is a company that’s “close to $2.5 billion in revenue” for ‘24.

Give us a minute.

Source: GIPHY. Better luck next year, “Dry January.”

Okay, that’s better. Good. G-d. It’s only January, and we already have a contender for the sloppiest bankruptcy of the year. It would be more efficient to cover what’s gone right with this company, but that’s not the kind of shop we run so let’s dive in ⬇️.