(WJET/WFXP) — Prospect Medical Holdings, a network of hospitals and affiliates across four states, filed for Chapter 11 bankruptcy late Saturday, along with its approximately 60 subsidiaries. The Los Angeles-based company said in a press release that it plans to "realign its organizational focus outside of California." Prospect Holdings plans to sell two Rhode Island facilities, the Roger Williams Medical Center in Providence and Our Lady of Fatima Medical Center in North Providence, to non-profit Centurion Foundation, pending court approval. The company is also working with "key stakeholders outside of Rhode Island and with the Commonwealth of Pennsylvania" to sell its Pennyslvania-based Crozer-Chester Medical Center. The company cited "a recent number of challenges" while explaining its decision to file for bankruptcy but did not go into detail about those challenges in the press release. More details about the challenges and headwinds are generally provided in subsequent court filings (known as First Day Motions). In October, the Pennsylvania Attorney General filed a lawsuit against the company for alleged mismanagement and neglect of the Pennsylvania-based health system. The lawsuit accused Prospect Medical Holdings, Inc. of mismanaging and neglecting the Crozer Health System, resulting in closures of facilities and a shattered network of care for hundreds of thousands of Pennsylvanians. The lawsuit alleges Prospect Medical has broken an Asset Purchase Agreement, approved by a court in 2016, by cutting services and closing facilities, while diverting funds to private shareholders and investors, rather than supporting the healthcare network. Last week, the Senate Budget Committee released a report accusing two private equity firms of wringing profits out of hospital in underserved communities, CBS News reports. One firm, Leonard Green & Partners, acquired Prospect Medical Holdings in 2010. The firm later dropped its stake in the company in 2022, according to CBS News, but the report claims the firm's "financial mismanagement" led to the closure of hospitals and a cut to multiple services. During the Chapter 11 process, the company said that all of its hospitals will remain open and care will be uninterrupted. It will continue to engage to finalize necessary funding during the process and is seeking an "expedited timeline" for the sale and restructuring process, but no estimate is given. Von Crockett, Prospect Holdings’ Chief Executive Officer, said, “Today’s actions represent an important step forward in our longstanding commitment to best serve the interests of our patients, physicians, employees, and communities. Divesting our operations outside of California will ensure that they receive necessary financial support so that the communities that rely on those facilities will maintain continued access to highly coordinated, personalized, and critical healthcare services long into the future.” In November, the company agreed to a $745 million deal with Astrana Health to sell certain assets, which is expected to be finalized in mid-2025 and, thus, was excluded from the Chapter 11 filing. Those assets -- "including its California licensed health care service plan (Prospect Health Plan), medical groups in California, Texas, Arizona and Rhode Island (Prospect Medical Groups), management service organization (Prospect Medical Systems), pharmacy (RightRx), and Alta Newport Hospital and Foothill Regional Medical Center" -- are not part of the bankruptcy filing. Prospect Medical Holdings, Inc., founded in 1998, currently owns 16 hospitals across four states including California, Connecticut, Pennsylvania, and Rhode Island. In addition to the hospitals, the company also operates 166 outpatient clinics and centers.