Steward Health Care, a bankrupt healthcare company, has put all of its 31 hospitals in the United States up for sale in an effort to address its $9 billion in total liabilities. The company, which filed for bankruptcy protection, aims to keep all of its hospitals open in the long term and hopes to finalize transactions by the end of summer to facilitate the sale process. Steward’s attorney stated that the goal is to ensure that none of the hospitals are closed, despite the change in ownership that will occur in many of them.
The privately owned company has faced criticism for its management and financial decisions, particularly in Massachusetts where a hospital was closed earlier this year. Officials have accused Steward of making short-sighted financial choices, including selling off real estate and incurring long-term rent obligations that have negatively impacted patient care. In court documents, Steward revealed its significant liabilities, including loans, rent obligations, unpaid bills, and employee wages, totaling over $9 billion.
Despite its substantial debt load, Steward maintains that it has real value and had been pursuing a sale of its physician group to UnitedHealth subsidiary Optum Care to repay loans and pay vendors. However, regulatory approvals for the sale were stalled, forcing the company to seek emergency financing that was insufficient to stabilize its operations. The company’s close proximity to running out of cash prompted the bankruptcy filing and subsequent sale of all hospitals to address its financial woes.
At a court hearing, Steward was granted permission to borrow $75 million from Medical Properties Trust, the owner of the real estate where the hospitals are located. Steward plans to borrow an additional $225 million from Medical Properties Trust during the bankruptcy proceedings. The company intends to hold auctions for its hospitals on June 28 and July 30, with the possibility of seeking additional time to sell the hospitals if needed. The goal is to avoid a fire sale of assets and maximize the value of the hospitals during the sale process.
Steward’s attorneys emphasized the importance of preserving the value of the hospitals during the sale process, highlighting the potential for significant value in the assets. Despite facing significant financial challenges, the company remains committed to keeping all hospitals open and ensuring that the communities they serve continue to have access to healthcare services. The sale of the hospitals is seen as a critical step in addressing the company’s liabilities and stabilizing its operations for the future.
