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UConn Health, Connecticut’s flagship academic medical institution, bid $13 million to purchase Waterbury Hospital from Prospect Medical Holdings, the California-based operator that filed for bankruptcy protection in January. UCHCFC Waterbury Hospital Corp., a corporation sponsored by UConn Health, will serve as the “stalking horse bidder” for the hospital in the court-supervised sale auction, according to court documents filed Friday morning. The “stalking horse” serves as the first bidder in a bankruptcy auction whose offer serves as the minimum bid. “We are pleased to have reached this important milestone in our sale process through a stalking horse agreement with UCHCFC Waterbury Health Corp., a Connecticut nonprofit sponsored by UConn Health. We look forward to completing the process efficiently and to the future partnership ahead,” Deborah Weymouth, CEO of Waterbury Health, stated in emailed comments. The $13 million cash offer includes $4 million for the operating assets and $9 million for the real estate. The state will also assume a limited set of the hospital’s liabilities, bringing the deal’s total value up to $35 million, according to the terms laid out in court documents. Other bidders can submit offers through November 14. A sale hearing, where the bankruptcy court judge will approve the sale, is scheduled for Nov. 17. During a press conference on Friday, Gov. Ned Lamont highlighted the effort it took to find a buyer for the struggling hospital. “We had to work really hard after what Prospect did to that hospital. We’ve got a strong bidder,” Lamont said. “I want people to know Waterbury Hospital is going to thrive under new leadership.” In a series of unannounced visits over the last two years, state health inspectors found deteriorating conditions at Waterbury Hospital, including a nurse staffing crisis, rusting equipment in operating rooms and alleged patient abuse. The purchase of Waterbury Hospital by the state is part of a broader plan to expand the footprint of UConn Health and make it more competitive with other academic medical institutions around the country. The state is also in talks to acquire two more private, independent hospitals that are also struggling: Bristol Hospital and Day Kimball Hospital in Putnam. Prospect originally paid $31.8 million to acquire Waterbury Hospital in 2016. While the state is purchasing Waterbury for less than half of what it was worth almost a decade ago, the facility will require deep investments to address significant quality issues, State Comptroller Sean Scanlon told The Connecticut Mirror last month. “There are significant capital expenditure needs to maintain what I would say is the level of public health care that our citizens deserve and expect. And, frankly, that’s not possible in the condition that this hospital is in right now,” Scanlon said. During a special session of the state legislature, scheduled for next week, lawmakers will vote to approve a bonding package to fund capital improvements at Waterbury, Bristol and Day Kimball Hospitals. If approved by the legislature, the state could borrow as much as $390 million to invest in the hospitals over a five-year period, according to a presentation during an Oct. 3 meeting of the University of Connecticut’s Board of Trustees and the UConn Health Board of Directors. The debt would be added to the “UConn 2000” bonding package, the state’s financing program for capital projects at its flagship university. UConn Health will also separately invest $31 million in the hospitals over five years, CEO Andrew Agwunobi said. The funding will cover the purchase of Waterbury Hospital, but the acquisition of Bristol and Day Kimball Hospitals will be handled separately, according to the state comptroller. Some level of forgiveness for the taxes Prospect owes the state will also be a part of the deal. However, those negotiations are happening separately and not explicitly included in the bid submitted on Friday. “The tax negotiations are ongoing. We’ll have more to share in the coming days,” Comptroller Scanlon said on Friday. Court records show that Prospect owes the state $127 million in hospital provider taxes going back more than three years. Once approved by the judge, any acquisition would have to go through the state’s approval process, overseen by the Office of Health Strategy, known as Certificate of Need. The state would have to approve the deal within 60 days of receiving a completed application, according to the guidelines of the emergency approval process reserved for hospitals that are involved in bankruptcy proceedings. Waterbury was the last of the Prospect’s three Connecticut hospitals that needed a buyer. Last month, the bankruptcy court judge approved the sale of the other two Prospect-owned facilities — Manchester Memorial and Rockville General — to Hartford HealthCare for $86.1 million. HHC submitted the sole bid. The transaction is currently under review by the state’s Office of Health Strategy. Katy Golvala is a reporter for the Connecticut Mirror. Copyright 2025 @ CT Mirror (ctmirror.org).
