Prospect Medical’s Bankruptcy Plan Sparks Slew of Objections

Prospect Medical Holdings Inc.'s proposed bankruptcy plan has prompted objections from about 30 parties—including individual creditors, insurers, former employees, and malpractice claimants—that say its terms are inadequate.

The private hospital owner, which filed Chapter 11 in January amid labor shortages and rising operational costs, has been working to sell off all of its assets to pay its creditors. It filed the plan in August.

McKesson Corp., which has pharmacy distribution agreements with Prospect, called the plan “premature” in a Wednesday filing with the US Bankruptcy Court for the Northern District of Texas. The pharmaceutical giant said it’s owed more than ...