Prospect Medical Holdings filed a complaint Wednesday against Yale New Haven Health, arguing the nonprofit system should be held to a previous agreement to acquire three Connecticut hospitals.
Los Angeles-based Prospect, a for-profit system, argued Yale New Haven lacks standing to get out of the deal, and knew the state of the hospitals and their financial issues before agreeing in 2022 to buy them, according to the complaint filed in the Superior Court for the Judicial District of Hartford.
Related: Yale New Haven Health sues to get out of proposed Prospect deal
Prospect and New Haven, Connecticut-based Yale New Haven signed a definitive agreement to transfer ownership of Waterbury Hospital, Manchester Memorial Hospital and Rockville General Hospital to Yale New Haven for $435 million.
In a May 3 filing, Yale New Haven said it is not obligated to close the deal based on the original agreement because Prospect violated its terms. Yale New Haven alleged that Prospect failed to pay clinicians and vendors and let the state of its facilities decline, in addition to being responsible for a data breach in August 2023.
Yale New Haven accused Prospect of "irresponsible financial practices, severe neglect and general mismanagement," according to the May filing.
"At no time ... over the course of almost two years did Yale New Haven Health signal concern or the need to adjust the purchase price," Prospect said in Wednesday's filing. "So, either Yale New Haven Health's filings with the government were misleading or its concerns have been manufactured on a post-hoc basis."
Yale New Haven has sought unsuccessfully to reduce the purchase price from $435 million to an undisclosed amount. The health system did not respond to a request for comment.
A Yale New Haven spokesperson said in a statement Wednesday that the health system stands by its May complaint and views Prospect’s filing as an attempt to shift attention away from its mismanagement of the facilities.
