Crozer Bankruptcy Hearing Update on W.A.R.N. Act Claims and CWA’s Claim for Unpaid Water Bills
Rep. Leanne Krueger December 16, 2025 | 3:29 PM
On Friday, the judge in Texas overseeing the bankruptcy case filed by Prospect Medical Holdings—after they closed Crozer-Chester Medical Center and other hospitals in Delaware County—held a hearing that lasted over seven hours. While the hearing covered many issues not directly related to Pennsylvania, the judge made three separate rulings specifically concerning Crozer Health.
First, Prospect asked the court to estimate their W.A.R.N. Act claim liability for the purposes of their bankruptcy confirmation plan, which would be decided later in the hearing. The federal Worker Adjustment and Retraining Notification (W.A.R.N.) Act requires employers to give at least 60 days’ written notice before closing a facility with 100 or more employees. Prospect violated this law by giving only one week’s notice before closing Crozer-Chester Medical Center and Taylor Hospital.
Former employees filed a lawsuit seeking over $21 million in damages to cover unpaid wages, salary, commissions, bonuses, accrued holiday and vacation pay, and health and life insurance benefits for the required 60-day period. On Friday, the judge sided with Prospect, estimating W.A.R.N. Act claims at $1.6 million for feasibility purposes—far less than what the former employees were seeking.
Second, an attorney from the Pennsylvania Attorney General’s office reported that the Pennsylvania Quality of Care Accountability Lawsuit against Prospect had been settled through an agreement with the Attorney General’s office. While we are still waiting for the full details in the judge’s signed order, the oral report indicates the following: The Commonwealth of Pennsylvania will amend its proofs of claim with updated priority amounts, which will be satisfied exclusively through certain payments already owed to the debtors by the Commonwealth. No distribution from the debtor’s estate will be required to satisfy the Commonwealth’s amended priority claims.
Third, the judge ruled on Chester Water Authority’s (CWA) request for unpaid water bills at Crozer-Chester. CWA sought $540,000 for unpaid bills and argued during the hearing that they were being subjected to a settlement and waterfall agreement to which they were not originally a party. The judge ruled that the previously approved settlement order is binding on CWA and other secured creditors, and that the time to object had passed since CWA had received notice. Because CWA did not file an appeal, the judge denied their objection.
There were no updates on the sales of Crozer-Chester or Springfield Hospitals. While both hospitals have prospective buyers who won bids during Prospect’s bankruptcy auction in October, the sales have not yet closed.
If you want to read more about Friday’s hearing, Kathleen Carey covered it for the Delco Times. You can read her story here: Judge estimates that $1.5 million be held in reserve for Crozer WARN Act violations.