Hartford HealthCare has won the right to buy Manchester Memorial and Rockville General hospitals for $86.1 million, according to documents filed in bankruptcy court late Saturday.
No other prospective buyers stepped forward by the deadline of 5 p.m. Thursday to submit a bid for the two troubled hospitals, currently owned by for-profit Prospect Medical Holdings. Without additional bidders, a bankruptcy auction scheduled for Oct. 22 will not take place.
Hartford HealthCare and Prospect officials could not immediately be reached for comment.
Bidding as ECHN Holdings Inc., Hartford HealthCare agreed to buy Manchester Memorial, Rockville General and affiliated entities “free and clear of liens, claims, encumbrances, and interests,” according to an asset purchase agreement filed with the notice of the winning bid on Saturday. The deal includes the land underneath the hospitals, which was sold to Alabama-based Medical Properties Trust as part of a controversial sale-leaseback transaction in 2019.
Prospect has been seeking to sell all of its Connecticut holdings – including Waterbury Hospital – since it filed for bankruptcy on Jan. 11.
UConn Health has said it intends to submit a bid to buy Waterbury Hospital in a deal that includes $13 million in cash and forgiveness of state tax debts, but no bid had been filed in the bankruptcy court record as of publication time.
Hartford HealthCare’s next step is to secure the approval of Judge Stacey Jernigan, who is hearing Prospect’s bankruptcy case in North Texas federal court. Jernigan has approved all of Prospect’s hospital transactions so far, including a for-profit chain’s bid to buy six California hospitals for $8.5 million and some assumption of debt.
The Hartford HealthCare hospital purchases will then have to be approved by state regulators.
After a lengthy approval process, Yale New Haven Health’s $435 million bid to buy all three hospitals foundered last amid allegations that Prospect mismanaged the hospitals after striking a deal, reducing their value. The court fight between the two systems ended earlier this month with Yale agreeing to pay $45 million in cash to settle the dispute.
If Hartford HealthCare wins all needed approvals and completes the purchase of Manchester Memorial and Rockville General, the two facilities will bring the system to nine hospitals and nearly 2,855 licensed hospital beds, making it the biggest hospital chain in the state by many metrics. Rival Yale New Haven Health operates five hospitals in Connecticut with a total of 2,568 licensed beds.
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