A federal bankruptcy judge has granted Prospect Medical Holdings permission to abandon Delaware County Memorial Hospital and Taylor Hospital, despite objections from the Pennsylvania Attorney General’s Office, Delaware County, Upper Darby Township and Ridley Park Borough related to potential public safety issues, lack of transparency, and abandonment of millions in local tax obligations. The ruling clears the way for California-based Prospect to relinquish ownership of the shuttered hospitals, citing that the properties have “no apparent value” and are burdens on its bankrupt estate. The decision could pave the way for quick sales, with the Upper Darby School District expected to acquire the Delaware County Memorial Hospital (DCMH) property for $1.2 million as soon as Aug. 13. The order requires Prospect to maintain fire suppression systems and “reasonable security” at both sites until any sale is finalized or the bankruptcy plan is completed. Municipalities and taxing authorities may still pursue unsecured claims for back taxes, though recovery is uncertain. The tax obligation for DCMH is estimated at $19.7 million, while Taylor Hospital’s is $7.6 million. The court also approved $15 million in emergency funding for Prospect to continue bankruptcy operations. The next hearing is scheduled for Wednesday, Aug. 20.
Source: Daily Times; 8/4/2025