Philadelphia-based Thomas Jefferson University is set to acquire Pottstown (Pa.) Medical Specialists, a 48-year-old physician-owned group, after the group canceled its bankruptcy auction and named Jefferson the successful bidder.
Pottstown Medical Specialists filed for Chapter 11 on Aug. 30 in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania. It signed an asset purchase agreement with Jefferson the same day. The agreement covers Jefferson and its controlled affiliates, including Lehigh Valley Physician Group. Jefferson also served as the group’s lender during the bankruptcy. Under the agreement, Jefferson can count the money owed on that loan toward the purchase price, known as a credit bid.
The group canceled the auction on Oct. 22, according to a court notice. On Oct. 27, it filed a proposed order asking the court to approve the sale free and clear of liens and claims.
The agreement does not set a single dollar price. Jefferson would instead:
- Pay off the group’s loans from Fulton Bank and Meridian Bank
- Credit the balance of its own bankruptcy loan
- Fund $200,000 for unsecured creditors
- Cover up to $150,000 in costs to take over leases and contracts and up to $100,000 in bills owed to suppliers since the filing
- Provide up to $1.9 million, minus the group’s cash on hand, to wind down the bankruptcy case
The sale must close by Jan. 1, 2027.
Fifteen physicians and 12 advanced practice providers are listed as clinicians whose employment agreements are part of the deal. Jefferson will consider certain nonclinical employees for jobs. The group’s six physician owners would have to repay part of the purchase price if they leave Jefferson within two years, unless they retire, become disabled, die or are let go without cause.
Pottstown Medical Specialists runs primary care and specialty offices in Collegeville, Stowe, Royersford, Boyertown and Pottstown, serving Berks and Montgomery counties. It listed estimated assets and liabilities of $1 million to $10 million each when it filed. It recorded more than $6 million in operating losses from 2023 to 2025, the Philadelphia Business Journal reported, citing court filings.
Becker’s has reached out to Thomas Jefferson and Pottstown Medical Specialists for comment.
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