Tier 1 Sites

In January 2025, California-based Prospect Medical Holdings – the for-profit owner of Waterbury Hospital – filed for Chapter 11 bankruptcy protection[1]. This move came after years of financial maneuvering and mismanagement that left the company buried in debt and its Connecticut hospitals in distress. Prospect had purchased Waterbury Hospital (along with Manchester Memorial and Rockville General) in 2016, but instead of investing in these facilities long-term, the company’s private equity owners extracted massive payouts. In 2019, Prospect sold the hospitals’ buildings to its landlord, Medical Properties Trust (MPT), in a sale-leaseback deal that generated a $457 million dividend for investors[2]. That windfall came at a cost: the hospitals were now saddled with hefty rent payments to MPT and reduced capital for patient care. By the time of the bankruptcy filing, Prospect reported between $1 billion and $10 billion in liabilities to over 100,000 creditors[3], including huge unpaid tax bills and vendor invoices. Connecticut’s Department of Revenue Services says Prospect neglected to pay roughly $67–100 million in state taxes[4], and the company (with MPT) owes more than $23 million to local towns – over $20 million to Waterbury alone – in property taxes[5].

State and federal officials have sharply criticized Prospect’s stewardship of these hospitals. Connecticut’s Attorney General William Tong blasted Prospect for “selling the ground out from under them to fund dividends to its shareholders,” accusing the owners of profiting while “throttling Connecticut’s healthcare infrastructure” and stiffing staff, vendors, and taxpayers[6]. U.S. Senator Chris Murphy likewise called Prospect’s handling of Waterbury Hospital “an abomination,” describing it as a textbook private-equity play: buy up a hospital, cut costs and services to maximize profit, then walk away through bankruptcy or sale[7][8]. Waterbury’s Mayor, Paul Pernerewski Jr., echoed these sentiments, recounting “the false promises made by Prospect…sucking out a lot of the profits…instead of putting [money] back into the hospitals.” He noted that Prospect’s “blatant mismanagement” not only jeopardized healthcare in Waterbury but also hurt the city’s finances by leaving a $22 million tax hole[9][10].

Impact on Waterbury Hospital and the Community

Waterbury Hospital remains open and caring for patients despite the bankruptcy, but the situation on the ground is challenging. The hospital is a vital safety-net provider serving nearly 400,000 residents of the Naugatuck Valley, offering services unavailable elsewhere nearby[11]. Prospect’s management failures severely strained the hospital’s operations in recent years. Frontline caregivers have reported crumbling infrastructure – leaking ceilings, broken equipment,...