RAIDING THE SAFETY NET: LEONARD GREEN & PARTNERS SEEKS TO WALK AWAY FROM PROSPECT MEDICAL HOLDINGS AFTER COLLECTING $570 MILLION IN FEES AND DIVIDENDS

The report details how Leonard Green & Partners extracted $570.44 million in fees and dividends from Prospect Medical Holdings while the health system faced widespread operational failures, including facility closures in Texas, quality rating declines in Connecticut, and legal disputes over pensions and taxes in Rhode Island and Pennsylvania. By November 2019, Leonard Green sought to sell its 61% stake to minority owners for $12 million, a fraction of its original investment, leaving behind a legacy of financial distress and deteriorating care at several safety net hospitals.

• Leonard Green & Partners and other owners extracted a total of $570.44 million from Prospect Medical Holdings through management fees and dividends between 2010 and 2019.
• In Texas, Prospect completely closed the Nix Health system as of January 4, 2020, resulting in 972 layoffs in San Antonio.
• Prospect's hospitals in Connecticut faced severe quality issues, with Waterbury Hospital receiving a one-star rating from the US Centers for Medicare and Medicaid and both Waterbury and Manchester hospitals cited for conditions placing patients in "immediate jeopardy."
• In Pennsylvania, Prospect failed to meet acquisition terms for the Crozer-Keystone Health System, including an arbitrator's ruling that it owed $23.7 million to the Crozer-Keystone Community Foundation and legal disputes over $480,000 in unpaid property taxes to a local school district.
• In Rhode Island, Prospect is facing class action lawsuits from pensioners who allege the firm hid the poor health of the pension plan to avoid regulatory liability.
• In New Jersey, Prospect attempted to sell East Orange General Hospital only three years into a five-year commitment, having invested $26 million of a promised $50 million.
• Leonard Green is exiting its 61% stake in Prospect by selling it to minority owners for $12 million, which represents only 1.4% of the approximately $885 million spent to acquire Prospect and several of its health systems.

APA

O’Grady, E. (2020). RAIDING THE SAFETY NET: LEONARD GREEN & PARTNERS SEEKS TO WALK AWAY FROM PROSPECT MEDICAL HOLDINGS AFTER COLLECTING $570 MILLION IN FEES AND DIVIDENDS. Private Equity Stakeholder Project. https://pestakeholder.org/wp-content/uploads/2020/02/Raiding-the-Safety-Net-Leonard-Green-PESP-012920.pdf

Chicago

O’Grady, Eileen. RAIDING THE SAFETY NET: LEONARD GREEN & PARTNERS SEEKS TO WALK AWAY FROM PROSPECT MEDICAL HOLDINGS AFTER COLLECTING $570 MILLION IN FEES AND DIVIDENDS. Private Equity Stakeholder Project, 2020. https://pestakeholder.org/wp-content/uploads/2020/02/Raiding-the-Safety-Net-Leonard-Green-PESP-012920.pdf.

Wikipedia

{{cite report |last1=O’Grady |first1=Eileen |title=RAIDING THE SAFETY NET: LEONARD GREEN & PARTNERS SEEKS TO WALK AWAY FROM PROSPECT MEDICAL HOLDINGS AFTER COLLECTING $570 MILLION IN FEES AND DIVIDENDS |publisher=Private Equity Stakeholder Project |date=January 2020 |url=https://pestakeholder.org/wp-content/uploads/2020/02/Raiding-the-Safety-Net-Leonard-Green-PESP-012920.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ogrady2020raiding, author = {O’Grady, Eileen}, title = {{RAIDING THE SAFETY NET: LEONARD GREEN \& PARTNERS SEEKS TO WALK AWAY FROM PROSPECT MEDICAL HOLDINGS AFTER COLLECTING \$570 MILLION IN FEES AND DIVIDENDS}}, institution = {Private Equity Stakeholder Project}, year = {2020}, month = jan, url = {https://pestakeholder.org/wp-content/uploads/2020/02/Raiding-the-Safety-Net-Leonard-Green-PESP-012920.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }