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, faulty plumbing, spotty heat and phone service – and chronic understaffing that has made it harder to deliver quality care[12][13]. In late 2024, state health regulators imposed a consent order on Waterbury Hospital after a series of safety violations (including two patient deaths) came to light. The Department of Public Health even appointed an independent monitor to oversee patient care, a step usually reserved for only the most troubled hospitals[14][15]. “This is a needed hospital…we have to keep this place open and functional,” said DPH Commissioner Dr. Manisha Juthani, underscoring that closure is not an option despite the difficulties[16].

Financially, the bankruptcy has created uncertainty but also a path toward a fresh start under new ownership. To keep Waterbury Hospital and its sister facilities running through the Chapter 11 process, a federal judge approved $30 million in emergency financing over the summer for day-to-day operations[17]. Hospital leaders assure the public that there has been no interruption in patient services – all procedures and appointments are continuing as scheduled[18] – and Prospect has stated it does not plan significant layoffs during the transition[19]. However, the prolonged sale process is taking a toll. Waterbury officials are relieved the hospital remains afloat but “frustrated” at how long it’s taking to finalize a sale[20]. Every month of delay prolongs the city’s inability to collect the back taxes tied up in bankruptcy (now part of a likely settlement or write-off)[21]. “The longer it takes, the greater the worry about the hospital’s future,” one city official said plainly[22].

For the 400 nurses and technicians represented by our union at Waterbury Hospital, the limbo is draining. Many staff have quit or retired amid the instability, and recruitment of replacements has faltered, worsening staffing shortages. “If this drags on for an indefinite period of time, staff numbers will shift away,” warned Dave Hannon, president of CHCA District 1199, calling the situation “dire.” “They don’t seem willing to recruit new staff… The morale level is dangerous,” Hannon said in July[23]. An internal union organizer reported that almost all departments are understaffed, with remaining nurses working excessive overtime – a combination that heightens the risk of medical errors and burnout[24]. U.S. Senator Richard Blumenthal also voiced alarm that “time is not on our side…morale [is] being damaged and patient care [put] at risk” while the bankruptcy drags on[25]. There is also the specter of what happened elsewhere: recent court filings revealed Prospect got permission to shut down two Pennsylvania hospitals after failing to find buyers[26]. That fate is something Waterbury’s community is desperate to avoid. Governor Ned Lamont’s office has emphasized that keeping Connecticut’s Prospect hospitals open is a top priority, and any sale will be closely monitored by state regulators to ensure continuity of care[27].

The Road to New Ownership: Who Will Save Waterbury Hospital?

A core purpose of Prospect’s Chapter 11 process is to sell Waterbury Hospital (and the other CT hospitals) to new operators who can stabilize and invest in them. Several bidders have stepped forward. In September, Hartford HealthCare – a major nonprofit network – made an initial $86 million bid to acquire Manchester Memorial and Rockville General, the two Eastern CT hospitals[28]. Meanwhile, for Waterbury Hospital, the University of Connecticut’s UConn Health has emerged as a leading contender. UConn’s Board of Trustees authorized a bid of up to $13 million to purchase Waterbury Hospital, including its building and land[29][30]. While $13 million may seem modest for a hospital, the state recognizes that enormous further investment will be needed post-sale. Connecticut officials have outlined a plan to bond $390 million to upgrade facilities and equipment across all three hospitals, with Waterbury slated for significant capital improvements to meet modern standards[31][32]. “There are significant capital expenditure needs…frankly, that’s not possible in the condition that this hospital is in right now,” said State Comptroller Sean Scanlon, highlighting the urgent infrastructure repairs Waterbury requires[33].

Importantly, not every suitor is viewed the same by workers or the community. Alongside nonprofit players like UConn Health, Northwell Health (a large New York-based health system) has shown interest[34]. But one name raised alarms: a for-profit entity called Healthcare Systems of America (HSA), which reportedly has private-equity ties[35]. Representatives of HSA even toured Waterbury Hospital over the summer, according to Dave Hannon[36]. The prospect of another profit-driven owner stepping in has galvanized union opposition. “Workers dread a potential purchase by another for-profit operator,” Hannon said, given the bitter experience with Prospect’s ownership[36]. Unions have vowed to fight to prevent any sale to a buyer that would repeat the mistakes of the past. “We’re doing our best to not allow that to happen,” Hannon emphasized[37]. Instead, the union is advocating for a responsible steward – ideally a public or nonprofit entity – that will prioritize patient care, invest in staff and facilities, and keep Waterbury Hospital’s services accessible to the community for the long haul.

The good news is that Connecticut’s leaders appear to agree that a “new era of investment and support” is needed[38]. State lawmakers have signaled willingness to sweeten a deal for a reputable buyer (for example, by forgiving millions in unpaid taxes as part of UConn’s bid) if it ensures the hospital’s survival and improvement[39][40]. “If we want to support UConn Health’s taking over the hospital then we will have to [forgive taxes] if it’s part of the deal,” said House Speaker Matt Ritter, noting the alternative could be a closure or another private firm stepping in[41]. There is also a broader lesson being acted upon: the need for tougher oversight of any hospital sale to private investors. Union advocates and legislators are working together to craft new laws requiring greater scrutiny and transparency when for-profit companies seek to buy hospitals[42]. A proposal to curb unchecked private equity hospital takeovers nearly passed earlier this year, and organizers say it will be revisited in the next legislative session[43]. “I think it was a mistake to ever allow Prospect to carve out a for-profit healthcare system in the state,” said AFT Connecticut Vice President John Brady. “Live and learn, I guess, as long as we learn”[44].

Union Response: Standing Up for Workers and Patients

From day one of this crisis, CHCA District 1199 – has been on the front lines advocating for our members and the community. Dave Hannon, CHCA District 1199 president, serves as the chair of the Unsecured Creditors Committee in Prospect’s bankruptcy case[45]. In that role, he’s representing the interests of nurses, techs, and other employees to ensure that our voices are heard in court and that issues like unpaid pension contributions and severance claims are not ignored. (Notably, Prospect’s failure to fully fund worker pension plans led federal regulators to file claims exceeding $386 million on behalf of pension guaranty agencies[46][47] – a stark reminder of what’s at stake for employees.) The union has also been coordinating with political leaders at all levels – from City Hall to the State Capitol to our Congressional delegation – to demand an outcome that protects both healthcare access and the livelihoods of hospital staff. We sounded alarms early and often about Prospect’s mismanagement, and those warnings have proven unfortunately accurate. “We’ve been trying to sound the alarm for years about Prospect’s mishandling of hospital operations,” Hannon said[48]. Now, our focus is on making sure those past mistakes are rectified and not repeated.

“We’ve been trying to sound the alarm for years about Prospect’s mishandling of hospital operations.” — Dave Hannon, CHCA District 1199 President[48]

Throughout the turmoil, the union’s message has been consistent: Waterbury Hospital must stay open and safe. “The immediate and long-term concerns are the same – Waterbury Hospital needs to stay open,” Hannon emphasized back in January when the bankruptcy news broke[49]. We have been reassured that the hospital will continue operating uninterrupted during the bankruptcy[18], and we are holding Prospect to that promise. Union representatives meet regularly with hospital management and the state-appointed monitor to address staffing, supply, and safety issues on the ground. Our frontline nurses like CHCA Co-President Sarah Campbell have bravely spoken out about the deteriorating conditions, which helped spur the state to take action last year[50][51]. Those efforts likely saved lives and kept the spotlight on why a competent new owner is urgently needed.
As we await final decisions, the union is also organizing and informing our members. Member meetings and updates are ongoing so that nurses and techs know their rights and the latest developments. We are prepared to support any workers affected by the transition. If a sale results in changes to employment terms or benefits, the union will be at the bargaining table to protect our members. And if, in a worst-case scenario, a buyer tries to cut services or staffing to unacceptable levels, we stand ready to mobilize collectively – up to and including public actions – to defend quality patient care.

Outlook: Cautious Optimism for a Brighter Future

After a long period of uncertainty, there are hopeful signs that Waterbury Hospital’s future will be secured. An auction process in bankruptcy court is underway this fall, and state leaders are working to ensure a qualified buyer is in place soon. The ideal outcome – one the union fully supports – would see Waterbury Hospital join a stable, community-focused health system (such as UConn Health or another nonprofit partner) that will invest in rebuilding the hospital. Significant public funding is lined up to modernize the facility and address the years of deferred maintenance and under-resourcing[31][52]. This means not only preserving jobs and services, but eventually expanding and improving them. Turning around the ailing hospital will cost at least $420 million over five years, according to state estimates[53], but that investment will pay off in a healthier community and a stronger workforce.

Union members are hopeful but vigilant. The memory of the failed 2022–2023 deal with Yale New Haven Health – which fell apart due to Yale’s concerns over Prospect’s finances and “mismanagement”[54] – is still fresh. “At this point, we’ve had a lot of false starts,” Dave Hannon observed, reflecting on the ups and downs of previous sale negotiations. “I think [members] are cautiously optimistic. I’m probably a little more optimistic,” he said of the renewed talks with UConn[55]. There is a shared determination that this time, we will get it right. The union will continue to work with allies to hold any new owner accountable to the promises of maintaining services, respecting workers’ rights, and investing in patient care. Our elected officials, from the City of Waterbury to the halls of Hartford, have made it clear that they too have learned from the Prospect saga and will not tolerate a repeat of corporate greed in our healthcare system[56][40].

In the coming weeks, as bids are finalized and plans take shape, CHCA District 1199 will keep all our members updated. We will also call on you to raise your voices if needed – whether that means contacting legislators, speaking at public hearings, or rallying in front of the hospital – to ensure Waterbury Hospital’s new chapter puts patients and workers over profits. This bankruptcy has been a difficult journey for everyone at Waterbury Hospital, but with unity and persistence, we believe a brighter, more secure future is within reach. Our union’s resolve is stronger than ever: we will fight for our hospital, our jobs, and our community’s health every step of the way.