US hospital network Steward files for bankruptcy, aims for new loan (updated)

Medical Properties Trust

06/05/2024 16:48

(Updates with comments from Massachusetts governor in
paragraphs 8-10, adds information from Steward)
    By Dietrich Knauth
       NEW YORK, May 6 (Reuters) - Steward Health, which
operates 31 hospitals in eight U.S. states, filed for Chapter 11
bankruptcy in Texas on Monday, aiming to secure a new loan from
its landlord Medical Properties Trust  MPW.N .
    Steward, the largest private physician-owned for-profit
healthcare network in the U.S., said it would continue serving
patients as normal during its bankruptcy.  
    Steward will seek up to $300 million in financing from
Medical Properties Trust, after failing to quickly close a sale
of its physician group Stewardship Health. The company is asking
for $75 million to start its bankruptcy case, with up to $225
million at a later date.
    "With the delay in closing of the Stewardship Health
transaction, Steward was forced to seek alternative methods of
bridging its operations," Steward CEO Ralph de la Torre said
Monday.  
    "With the additional financing in this process, we are
confident that we will keep hospitals open, supplied, and
operating so that our care of our patients and our employees is
maintained," de la Torre added in a statement.
    Steward employees 4,500 primary and specialty care
physicians with 3,600 staffed beds and nearly 30,000 employees. 
Steward Health Care provides care to more than two million
patients annually.
    The company recently closed a hospital in Massachusetts.
State officials and politicians have said it did not disclose
the extent of its financial troubles until they were deep enough
to imperil medical care in eight remaining hospitals it operates
in the commonwealth. 
    Massachusetts Governor Maura Healey said in a Monday press
conference that her team has been working to minimize the
bankruptcy's impact on patients, and she would support an
orderly bankruptcy sale away from Steward's "failed management
team." 
    "Ultimately, this is a step toward our goal of getting
Steward out of Massachusetts," Healey said.
    Steward's court-supervised bankruptcy will provide
transparency into the company's finances, so that its "failed
management team" will "no longer be able to lie" about its
debts, the governor added.
    Steward filed for bankruptcy with between $1 billion and $10
billion in liabilities, according to its Chapter 11 petition
filed in Houston, Texas bankruptcy court.  

 (Reporting by Dietrich Knauth in New York; Editing by Alexander
Smith and Bill Berkrot)
 ((Dietrich.Knauth@thomsonreuters.com;))