Timeline for sale of Steward Health Care hospitals
Steward Health Care, the operator of the third largest hospital system in Massachusetts and one of the state’s largest employers, is aiming to sell its Massachusetts hospitals before the end of June, but the company’s lawyer said that timeline may be aggressive.The Texas-based company declared bankruptcy on Monday, seeking legal protection to restructure its debt while leaving its hospitals open.A virtual hearing in federal bankruptcy court was held on Tuesday morning, the start of a months-long process that Massachusetts government leaders hope provide some transparency into the troubled company’s finances.The for-profit, private equity-backed hospital group’s troubles exploded into view this year with the revelation that it owed about $50 million in unpaid rent. Steward officials subsequently closed one facility and have expressed interest in selling their other holdings.According to Reuters, in court documents filed before the hearing, Steward said it had over $9 billion in total liabilities, including $1.2 billion in loans, $6.6 billion in long-term rent obligations, nearly $1 billion in unpaid bills from medical vendors and suppliers and $290 million in unpaid employee wages and benefits.Ray Schrock, Steward’s lawyer, presented a timeline for the sale of most of its hospitals located outside of Florida. “We’ve got a June 25 deadline and option for all hospitals other than Florida, and then a sale hearing,” Schrock said at the virtual hearing. “We’ll see how the timing goes. We’ll see whether or not this is revisited. We’re going to keep our word and do everything we can to meet it.”Steward intends to hold auctions on June 28 for its hospitals outside of Florida and July 30 for its nine hospitals in Florida. However, Schrock told the bankruptcy court that the timeline for closing was “not feasible.””I’m here to tell you now, you can’t close these hospital sales on the timeline of like the end of June. It’s not feasible,” Schrock said. “The Florida deadlines, we think, are much more realistic.””My focus remains on protecting jobs, protecting patients, obviously, and really the stability of the health care system,” Massachusetts Gov. Maura Healey said. “I have every interest in seeing things move as quickly as possible in a way that we protect patients and their ability to get needed care.”Reuters reported that at Tuesday’s hearing, U.S. Bankruptcy Judge Chris Lopez allowed Steward to borrow $75 million from Medical Properties Trust, which owns the real estate where Steward’s hospitals are located and is owed $6.6 billion on leases that run until 2041. Steward hopes to borrow an additional $225 million from Medical Properties Trust later in its bankruptcy.State officials also launched a website to distribute information about the situation.Steward’s eight hospitals in Massachusetts are St. Elizabeth’s in Brighton, Carney Hospital in Dorchester, Good Samaritan Medical Center in Brockton, Holy Family Hospital in Methuen, Haverhill Hospital in Haverhill, Morton Hospital in Taunton, Nashoba Valley Medical Center in Ayer, and St. Anne’s in Fall River. Norwood Hospital, which was being rebuilt, also belongs to Steward. The company said it does not expect any interruption to day-to-day operations and that the bankruptcy filing was “a necessary measure to allow the company to continue to provide necessary care to its patients in their communities without disruption.””Our goal remains that there are zero hospitals closed on our watch,” Schrock said. “There’s going to be a change in ownership in many hospitals, we recognize that. But we don’t want to see any of these communities fail to be served.”Massachusetts attorney general Andrew Campbell is pushing to appoint an advocate to stand up for patients and employees. “The office has the authority to review any proposed sale and we would do so in order to best protect access to a competitive and affordable health care marketplace,” a written statement from Campbell said. Legal counsel representing Massachusetts’ interests also attended the Chapter 11 bankruptcy proceeding on Tuesday. “The hospitals that were open yesterday remain open today,” Health and Human Services Secretary Kate Walsh said. “A federal court in Texas will be working with Steward creditors, our legal representation and others to address their financial challenges.”Last week, Massachusetts officials announced the activation of an “Emergency Operations Plan” in response to the crisis.According to State House News Service, officials last month began holding private meetings with local health care leaders to help navigate the uncertainty around the Steward crisis, a step that Health and Human Services Secretary Kate Walsh said should be “very reassuring” to those concerned about preparation for disruption.During a recent Senate oversight hearing, Walsh said officials were preparing for Steward to potentially file for bankruptcy and acknowledged there had been some discussion surrounding receivership.
Steward Health Care, the operator of the third largest hospital system in Massachusetts and one of the state’s largest employers, is aiming to sell its Massachusetts hospitals before the end of June, but the company’s lawyer said that timeline may be aggressive.
The Texas-based company declared bankruptcy on Monday, seeking legal protection to restructure its debt while leaving its hospitals open.
A virtual hearing in federal bankruptcy court was held on Tuesday morning, the start of a months-long process that Massachusetts government leaders hope provide some transparency into the troubled company’s finances.
The for-profit, private equity-backed hospital group’s troubles exploded into view this year with the revelation that it owed about $50 million in unpaid rent. Steward officials subsequently closed one facility and have expressed interest in selling their other holdings.
According to Reuters, in court documents filed before the hearing, Steward said it had over $9 billion in total liabilities, including $1.2 billion in loans, $6.6 billion in long-term rent obligations, nearly $1 billion in unpaid bills from medical vendors and suppliers and $290 million in unpaid employee wages and benefits.
Ray Schrock, Steward’s lawyer, presented a timeline for the sale of most of its hospitals located outside of Florida.
“We’ve got a June 25 deadline and option for all hospitals other than Florida, and then a sale hearing,” Schrock said at the virtual hearing. “We’ll see how the timing goes. We’ll see whether or not this is revisited. We’re going to keep our word and do everything we can to meet it.”
Steward intends to hold auctions on June 28 for its hospitals outside of Florida and July 30 for its nine hospitals in Florida.
However, Schrock told the bankruptcy court that the timeline for closing was “not feasible.”
“I’m here to tell you now, you can’t close these hospital sales on the timeline of like the end of June. It’s not feasible,” Schrock said. “The Florida deadlines, we think, are much more realistic.”
“My focus remains on protecting jobs, protecting patients, obviously, and really the stability of the health care system,” Massachusetts Gov. Maura Healey said. “I have every interest in seeing things move as quickly as possible in a way that we protect patients and their ability to get needed care.”
Reuters reported that at Tuesday’s hearing, U.S. Bankruptcy Judge Chris Lopez allowed Steward to borrow $75 million from Medical Properties Trust, which owns the real estate where Steward’s hospitals are located and is owed $6.6 billion on leases that run until 2041. Steward hopes to borrow an additional $225 million from Medical Properties Trust later in its bankruptcy.
State officials also launched a website to distribute information about the situation.
Steward’s eight hospitals in Massachusetts are St. Elizabeth’s in Brighton, Carney Hospital in Dorchester, Good Samaritan Medical Center in Brockton, Holy Family Hospital in Methuen, Haverhill Hospital in Haverhill, Morton Hospital in Taunton, Nashoba Valley Medical Center in Ayer, and St. Anne’s in Fall River. Norwood Hospital, which was being rebuilt, also belongs to Steward.
The company said it does not expect any interruption to day-to-day operations and that the bankruptcy filing was “a necessary measure to allow the company to continue to provide necessary care to its patients in their communities without disruption.”
“Our goal remains that there are zero hospitals closed on our watch,” Schrock said. “There’s going to be a change in ownership in many hospitals, we recognize that. But we don’t want to see any of these communities fail to be served.”
Massachusetts attorney general Andrew Campbell is pushing to appoint an advocate to stand up for patients and employees. “The office has the authority to review any proposed sale and we would do so in order to best protect access to a competitive and affordable health care marketplace,” a written statement from Campbell said.
Legal counsel representing Massachusetts’ interests also attended the Chapter 11 bankruptcy proceeding on Tuesday.
“The hospitals that were open yesterday remain open today,” Health and Human Services Secretary Kate Walsh said. “A federal court in Texas will be working with Steward creditors, our legal representation and others to address their financial challenges.”
Last week, Massachusetts officials announced the activation of an “Emergency Operations Plan” in response to the crisis.
According to State House News Service, officials last month began holding private meetings with local health care leaders to help navigate the uncertainty around the Steward crisis, a step that Health and Human Services Secretary Kate Walsh said should be “very reassuring” to those concerned about preparation for disruption.
During a recent Senate oversight hearing, Walsh said officials were preparing for Steward to potentially file for bankruptcy and acknowledged there had been some discussion surrounding receivership.
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