Crozer-Keystone's owner failed to put disputed $21.5M into escrow

Crozer-Keystone Health System’s owner, Prospect Medical Holdings Inc., failed to put $21.5 million into an escrow account by Aug. 10, as required by a June 22 court order, according to legal filings in a dispute over the final price for the sale of Crozer last year.

The deal was valued at $300 million, but most of that was for debt and other liabilities.

The dispute between Crozer-Keystone Community Foundation and Prospect Medical centers on how much Prospect had to pay for the net working capital it received when the deal closed last summer. Prospect has paid $32.93 million. The foundation claims it is owed an additional $21.5 million including interest.

During a hearing in June, the parties agreed to hire accounting firm Baker Tilly to figure out how much Prospect owes. That agreement also called for Prospect to deposit $21.5 million in a TD Bank escrow account.

Because Prospect failed to do so, attorneys for the foundation, Rocco P. Imperatrice III and Patricia L. Rizzo, of Imperatrice, Amarant & Bell P.C., on Monday asked the Orphans’ Court in Delaware County to order Prospect to pay the foundation $100,000 a day until it fulfills the June order. The petition also asked the court to appoint a conservator to oversee Crozer’s finances.

The latest filings were first reported by the Delaware County Daily Times.