(Bloomberg) — Medical Properties Trust Inc., one of the largest hospital landlords in the US, has moved to take control of three Southern California health care entities after accusing the owner — Prospect Medical Holdings — of defaulting on debt.

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MPT has demanded that the board members of three units resign so they can be replaced by MPT-designated independent managers, according to a Nov. 18 letter to Prospect from MPT, a copy of which was seen by Bloomberg News. The company also warned Prospect that MPT could still foreclose on the properties if the debt default is not cleared.

MPT confirmed the demand Tuesday, saying in a statement that its relationship will remain as Prospect’s landlord and “will continue to have no involvement in hospital operations.”

“As disclosed on MPT’s recent earnings call, Prospect did not pay cash rent during the third quarter as its liquidity continues to be impacted by ongoing sales processes in various east coast markets,” a spokesperson for MPT said in the statement. “As a result, MPT has asserted its right to appoint new independent directors to the Board of certain Prospect entities.”

The targets include one of Prospect’s flagship entities, Alta Hospitals System, which owned three hospitals when Prospect bought the company in 2007. That purchase began Prospect’s experiment in what it calls “coordinated regional care,” which aims to boost profit by making medical services in an area more efficient.

Representatives for Medical Properties Trust and Prospect Medical did not respond to requests for comment.

Medical Properties Trust buys medical facilities and leases them back to the operators. In 2019, Prospect sold several properties to MPT as part of a $1.55 billion deal.

MPT announced a restructuring of its agreement with Prospect last year after months of missed rent payments. Under the deal, MPT wound up holding more than $1 billion worth of assets related to Prospect. The health-care company refinanced some debt, but still owes hundreds of millions of dollars to its landlord and other lenders.

The landlord has tangled with other medical firms that run hospitals on property that MPT owns. Bankrupt hospital operator Steward Health Care System accused Medical Properties of improperly interfering with a court-approved plan to sell some properties to pay off creditors.

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