Prospect Medical Holdings Inc., a hospital chain facing financial difficulties, has won court permission to draw from its $100 million Chapter 11 financing despite opposition from landlord Medical Properties Trust Inc.
The firm had only approximately $3 million in funds available before filing for bankruptcy on January 11. In response, Prospect Medical requested permission to access the full amount of financing, which was challenged by MPT.
In a court hearing on Tuesday, Judge Stacey G.C. Jernigan authorized the request, allowing Prospect to draw from its financing. The decision came after company advisers testified that Prospect’s cash reserves had dwindled to almost nothing before filing for protection. MPT had argued that drawing from the financing would improperly prioritize new debt ahead of existing liens.
Source: https://www.bloomberg.com/news/articles/2025-01-15/prospect-medical-faces-landlord-brawl-cash-burn-in-bankruptcy