Delaware County lawsuit disrupts Crozer Health sale efforts

A civil lawsuit in Delaware County has complicated the sale of Crozer Health's four hospitals. A judge ruled to block funds from a local nonprofit, the Foundation for Delaware County, from going to Prospect Medical Holdings, which currently owns Crozer. The lawsuit was filed by Donald Delson, a board member of the foundation, who claims the funds were meant for charitable purposes and not for Prospect, which is undergoing bankruptcy. Shortly after the judge's decision, Delson and the foundation sought to end the case, as the lawsuit could hinder finding a new buyer for the hospitals. Representatives from the Pennsylvania Attorney General's office stated that the lawsuit is threatening efforts to sell the crumbling health system. They expressed urgency in resolving the situation, as they believed time is running out. The Foundation for Delaware County, established with funds from Crozer's previous sale, has been supporting local health projects. Recently, it committed $7 million to keep Crozer-Chester Medical Center and Taylor Hospital operational for two weeks during this crisis. In a virtual conference, U.S. Bankruptcy Judge Stacey G. C. Jernigan expressed concern about the developments and the need for a long-term solution. The foundation continues to seek ways to support Crozer Health while facing limitations in communicating with potential buyers. Prospect Medical Holdings announced plans to sell Crozer Health to a not-for-profit group, although no specific buyers have been named yet. Penn Medicine has shown interest in forming a consortium to aid the sale but has yet to confirm any agreements.