Upper Darby School District has agreed to buy the shuttered Delaware County Memorial Hospital complex for $600,000, according to a court filing Monday in Prospect Medical Holdings’ bankruptcy.
But if the sale does not close by Aug. 13, Prospect will be able to abandon the property, U.S. Bankruptcy Judge Stacey Jernigan ruled. Even after abandonment, the California for-profit would have to pay for fire suppression and security services until its bankruptcy plan is approved.
Delaware County Memorial is next to Upper Darby High School, and the plan is to demolish the hospital, a medical office building, and a parking garage, Trey Monsour, an attorney for the school district, told the judge. Monsour said there have been two recent incidents of kids breaking into the hospital.
“We’re ready to move forward. We’re going to close on the 13th, we’re going to take over the properties, we’re going to secure the properties,” Monsour said. Upper Darby was interested in acquiring the neighboring hospital for school expansion even before Prospect filed for bankruptcy protection in January.
Daniel P. McGarry, superintendent of Upper Darby School District, said in an interview Monday evening that the district had been trying for more than two years to acquire the hospital, which closed in November 2022.
“We need to expand,” McGarry said. “If it had remained a hospital we would have fully supported that, but if it was going to go into the hands of somebody else, there’s nobody better than the school district to try to get that property.”
Development with Taylor Hospital
Since Prospect filed its motion to abandon the two hospitals on July 25, arguing that they are burdensome and of inconsequential value, a potential buyer has emerged for Taylor Hospital in Ridley Park, said Maegan Quejada, an attorney for Prospect.
“We aren’t able to provide more details on the third-party buyer as of now, but we can say they had a site visit this morning, and we’re hoping for good news on that,” Quejada said.
If that sale doesn’t happen quickly, Prospect will jettison Taylor from the bankruptcy case, but the timing is fluid, Quejada said. Taylor closed in April.
Prospect’s motion to abandon the two hospitals said that property tax claims at Delaware County Memorial are $19.74 million and $7.67 million at Taylor.
To resolve taxing authorities’ objections to the abandonment motion, Prospect agreed to allow Delaware County, Ridley School District, and others to have general unsecured claims in the bankruptcy.
Upper Darby Township, where Delaware County Memorial is located, did not agree to that compromise, but was overruled.
Under the original abandonment motion, the municipalities would have to purse a tax lien sale, which could take years.
No mention was made during the hearing on efforts to sell Crozer-Chester Medical Center or Springfield Hospital. Crozer closed in May. Springfield closed in 2022.