resolution were near settlement or scheduled to go to trial when the hold began. Many alleged egregious harms, including wrongful deaths or debilitating injuries requiring costly care.
The widower of a 39-year-old physician sued the company in state court in Hartford, Connecticut, in 2022, alleging his wife died from negligent care following an emergency cesarean section at the Prospect hospital where she worked. Parents of a 10-month-old boy filed suit in state court in Philadelphia in 2023, claiming he’ d required multiple operations( and eventually removal of his esophagus) after ER doctors failed to conduct tests revealing that he’ d swallowed a button battery. A 2019 Pennsylvania case claimed a man’ s bowel was perforated during a hernia repair, triggering life-threatening complications that required five more surgeries. In court filings in each of these cases, Prospect, its hospitals and its doctors denied the allegations of malpractice, negligence or wrongful death.
The insurance chaos began to surface in late October, after the Texas judge presiding over Prospect’ s bankruptcy lifted the initial litigation hold. Her move followed failed efforts to persuade private insurers responsible for covering awards in excess of what Prospect’ s self-insurance provided to kick in money for mediated settlements. The private insurers’ reasoning, according to bankruptcy court filings: their“ reinsurance” contracts required them to pay only in cases where Prospect had already paid its entire share, similar to an auto insurance deductible.
In Connecticut and Rhode Island, Prospect had promised to pay $ 7.5 million for each lawsuit before any outside coverage kicked in. In Pennsylvania, Prospect relied on another form of self-insurance: a Vermont-based insurance subsidiary. That business was supposed to pay the first $ 500,000 of Pennsylvania malpractice costs, but it appears Prospect underfunded the subsidiary.( By exactly how much remains unclear.) Complicating matters further: For Pennsylvania cases filed after October 2020, the subsidiary wasn’ t required to contribute until after Prospect had covered the first $ 250,000.
There are similar problems in California, where Prospect sold its six hospitals in the bankruptcy proceedings to a new for-profit company. Los Angeles attorney Judith Tishkoff, whose firm has represented Prospect for years, last week filed to withdraw from seven malpractice cases, saying Prospect’ s general counsel has told her there is no insurance coverage and no money to pay any defense costs or legal fees.
Even those who win court awards or settlements against Prospect seem destined to be treated as unsecured claims in the company’ s bankruptcy. Like vendors with unpaid bills for hospital linens and bandages, they’ re likely to receive just pennies on the dollar, bankruptcy lawyers told ProPublica. Some plaintiffs lawyers, who get paid on a contingency basis, say they’ re declining to take on new malpractice cases involving Prospect, given the difficulty of obtaining any recovery.
Pennsylvania attorney Leonard Sloane is among them.“ It’ s a gamble to take on a new case,” said Sloane.“ To pursue one of these claims is very expensive. There’ s gotta be something at the end, otherwise what’ s the sense of pursuing on behalf of a client who gets nothing?” Sloane represents the survivors of a
67-year-old woman who died in 2022 after a Prospect surgeon performing a partial lung removal mistakenly cut a pulmonary vein, leading to a cascade of complications. The doctor acknowledged in medical records that he’ d made“ a technical mistake,” but the lawyer representing him and Prospect has moved to throw out claims for punitive damages, denying his actions met the legal standard of“ recklessness.” Sloane, who has been practicing for 50 years, believes the family’ s case is strong,“ but if there’ s no coverage, that’ s the end.”
Prospect promised the doctors it employed malpractice coverage, but those facing lawsuits have learned they may have to foot hundreds of thousands in legal costs personally, plus any settlements or court awards.
Dr. John Horan, 69, is a family physician in Rhode Island who has been practicing medicine for 41 years. He sold his practice to Prospect in 2016 and worked for the company until 2022. That year, the family of a patient who died filed a lawsuit blaming him for failing to diagnose her lung cancer. Horan denies he’ s at fault. In December 2025, Horan’ s lawyer told him Prospect was refusing to defend him or pay any of his costs.“ I was nauseous for the next month,” he told ProPublica. Horan and his wife have met with a bankruptcy lawyer.
Paul Galamaga, Horan’ s defense attorney, said he was handling 10 Prospect-related cases in Rhode Island when the company filed for bankruptcy. Prospect owes him about $ 183,000. He’ s won court approval to withdraw from seven of the lawsuits but continues to represent Horan and two other physicians, who he says will now have to pay him personally.“ There’ s no money to pay me or defend any of the doctors,” Galamaga said.
Some defense lawyers have sought to reimpose a freeze on proceedings, citing the uncertainty about Prospect’ s ability to pay. In Pennsylvania, attorney Ben Post, whose firm is listed in court filings as defense counsel in 16 Prospect malpractice lawsuits, filed motions late last year seeking to clamp a stay on several malpractice cases. If he didn’ t get it, he said, he’ d have“ no choice” but to withdraw.
In response to one such filing, plaintiffs attorney Francis Curran wrote that his 83-year-old client had been seeking redress for her husband’ s death for nine years.“ With each additional delay,” he said,“ it becomes less and less likely that Plaintiff will receive just compensation during her lifetime.”( Although one of Post’ s stay requests has already been denied, a lawyer his firm has retained to help navigate the insurance uncertainty said Post has no immediate plans to withdraw from any cases.)
In February, the Rhode Island legislature approved an $ 18 million emergency loan guarantee to assure the of Prospect’ s two struggling Providence-area hospitals, Our Lady of Fatima and Roger Williams Medical Center, to a Georgia-based nonprofit. Rep. Charlene Lima took to the floor to talk about the risk to local physicians left without promised malpractice coverage, warning that it could force them into bankruptcy and worsen the shortage of primary care doctors in Rhode Island.
“ The state shares culpability in this situation,” Lima said in
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