Yale New Haven Health Settles $45M Dispute Over Connecticut Hospital Sale

Yale New Haven Health (YNHH) has agreed to pay $45 million to Prospect Medical Holdings to settle a lawsuit arising from a failed $435 million acquisition deal of three Connecticut hospitals, including Waterbury, Manchester Memorial, and Rockville General. The deal, initially signed in 2022, collapsed after YNHH sought to back out in late 2024 citing facility condition concerns, leading to dueling lawsuits and Prospect's bankruptcy filing in early 2025. The settlement, reached through mediation involving the parties and Prospect's landlord Medical Properties Trust, aims to end costly litigation and provide clarity for the ongoing bankruptcy sale process, where other bidders like Hartford HealthCare and UConn Health have made offers for the hospitals. Prospect blamed Yale's legal actions partly for its bankruptcy, while Yale cited the bankruptcy as proof of Prospect's mismanagement. The hospitals have since deteriorated, accumulating significant unpaid debts, and legal fees for Prospect's bankruptcy have exceeded $60 million. The settlement, pending court approval, allows both parties to move forward and focus on other matters related to the hospitals' futures.