Sample LP Letter to Leonard Green & Partners Re: Prospect Medical Holdings

The letter criticizes Leonard Green & Partners for aggressive financial policies at Prospect Medical Holdings, including dividend recapitalizations and a controversial $10 million buyout. It highlights a dramatic decline in EBITDA, high debt levels, and poor hospital quality ratings, arguing that these actions prioritize short-term private equity gains over long-term healthcare stability and patient care.

• Leonard Green & Partners is selling its majority stake in Prospect Medical Holdings to the company's own management for $10 million, using the company's "corporate cash," which is a significant decrease from a 2016 valuation that may have reached $1 billion.
• The financial performance of Prospect Medical Holdings declined sharply between 2015 and 2018, with EBITDA falling from $142 million to $17 million and the EBITDA margin dropping from 10.8% to 0.62%.
• Since 2010, Leonard Green and other owners extracted approximately $658 million in fees and debt-funded dividends, contributing to a total debt of $1.1 billion and $260 million in unfunded pension liabilities as of September 2018.
• Operational and quality failures are evident, with most Prospect hospitals receiving the lowest one or two star ratings from the Centers for Medicare and Medicaid Services, and the company shutting down all healthcare facilities in Texas.
• The investment group's collection of a $457 million dividend in 2018 allegedly violated a 2014 commitment made to Rhode Island state regulators to refrain from paying additional dividends.

APA

Private Equity Stakeholder Project (n.d.). Sample LP Letter to Leonard Green & Partners Re: Prospect Medical Holdings. https://pestakeholder.org/wp-content/uploads/2020/07/Leonard-Green-LP-sample-letter.pdf

Chicago

Private Equity Stakeholder Project. Sample LP Letter to Leonard Green & Partners Re: Prospect Medical Holdings. n.d. https://pestakeholder.org/wp-content/uploads/2020/07/Leonard-Green-LP-sample-letter.pdf.

Wikipedia

{{cite press release |author=Private Equity Stakeholder Project |title=Sample LP Letter to Leonard Green & Partners Re: Prospect Medical Holdings |url=https://pestakeholder.org/wp-content/uploads/2020/07/Leonard-Green-LP-sample-letter.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{privateequitystakeholderprojectndsample, author = {{Private Equity Stakeholder Project}}, title = {{Sample LP Letter to Leonard Green \& Partners Re: Prospect Medical Holdings}}, publisher = {Private Equity Stakeholder Project}, url = {https://pestakeholder.org/wp-content/uploads/2020/07/Leonard-Green-LP-sample-letter.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }