- Steward Health Care is transferring over a dozen hospitals to new operators as part of a settlement with its landlord, MPT, amid bankruptcy.
- The agreement will alleviate billions in lease obligations and distribute $395M from hospital sales to lenders and creditors.
- A Senate committee will probe Steward’s management issues on Sept. 12, following the bankruptcy that affected 30 hospitals across multiple states.
As reported in Bloomberg, Steward Health Care has received initial approval for a settlement with Medical Properties Trust (MPT), its primary landlord, as part of its ongoing bankruptcy proceedings.
The agreement, approved by US Bankruptcy Judge Christopher Lopez, will allow Steward to transfer more than a dozen hospitals to new operators, preventing their potential closure and helping resolve billions in outstanding lease obligations.
Hospital Transfers
The settlement also outlines a path for distributing $395M from the sale of Steward’s northern Florida hospitals to the company’s lenders and unsecured creditors.
As part of the agreement, Steward and its unsecured creditors committee will drop potential legal claims against MPT, while the REIT agrees to waive significant lease liabilities.
Steward’s attorney, Ray Schrock, stated that transitioning hospital operations to new management will help the company avoid additional operational costs and avert expensive legal battles.
Zooming Out
Steward Health Care, which filed for Chapter 11 bankruptcy in May, has faced increased scrutiny from lawmakers regarding its financial management and the impact on its hospitals.
The company once operated about 30 hospitals across several states, including Florida and Massachusetts, but has been selling off facilities as part of its restructuring efforts. In Massachusetts, two Steward hospitals were recently closed after receiving emergency state funding.
What’s Next
In response to Steward’s financial troubles, a Senate committee is scheduled to hold a hearing on September 12 to investigate the company’s alleged mismanagement and its effect on patient care.
Steward’s bankruptcy case, filed under Steward Health Care System LLC, 24-90213, is being handled in the US Bankruptcy Court for the Southern District of Texas.
The final terms of the settlement are also expected to be completed in the coming days, with Judge Lopez set to make a final ruling later this month.
