Letters to State AGs – Leonard Green Should Give Back the Dividends and Fees it Collected from Safety Net Hospital Company Prospect Medical Holdings

Last week, Private Equity Stakeholder Project sent letters to states’ Attorneys General and other regulators in states where Prospect Medical Holdings owns hospitals.

Prospect Medical Holdings is a safety net hospital company owned by private equity firm Leonard Green & Partners. The Leonard Green-led ownership group has drawn more than $658 million dollars in dividends and fees from Prospect Medical Holdings even as the hospitals suffered operating challenges, substantially underfunded pensions, and regulatory scrutiny.

Our letters ask that the regulators decline to approve Prospect’s proposed change of ownership until Leonard Green returns the fees and dividends it collected from Prospect to ensure the hospitals and health care workers have as many resources as possible to respond to the COVID-19 pandemic.

Letter to California Attorney General Xavier Becerra

Letter to Connecticut Attorney General William Tong

Letter to Connecticut Office of Health Strategy

Letter to State Health Planning Board of New Jersey

Letter to Pennsylvania Attorney General Josh Shapiro

Letter to Rhode Island Attorney General Peter Neronha

See our January 2020 report “Raiding the Safety Net: Leonard Green & Partners Seeks to Walk Away from Prospect Medical Holdings after Collecting $570 Million in Fees and Dividends.” Our May 2020 update to the report is here: “UPDATE: Leonard Green-led ownership collected $658 million from safety-net hospital company despite challenges, commitment to regulators to forgo dividends”