By Dietrich Knauth
NEW YORK (Reuters) – Bankrupt Steward Health Care has put all of its 31 U.S. hospitals up for sale, hoping to finalize transactions by the end of summer to settle its total liabilities of 9 billion dollars, his lawyers said during a court hearing Tuesday in Houston.
Steward, which filed for bankruptcy protection Monday, hopes to keep all of its hospitals open long-term, Steward’s attorney, Ray Schrock, told U.S. Bankruptcy Judge Chris Lopez, who is overseeing the Chapter 11 proceedings.
“Our goal remains that there are no closed hospitals on our watch,” Schrock said. “There is going to be a change of ownership in many hospitals, we are aware of that. But we don’t want any of these communities to go unserved.
The private company closed a hospital in Massachusetts earlier this year, and officials in that state have criticized Steward’s management and its former shareholders for making short-sighted financial decisions that compromised patient care. Massachusetts officials were particularly critical of a series of deals that sold off the company’s real estate holdings and imposed long-term rents on it at its hospitals.
In court documents filed before the hearing, Steward said he had total liabilities of more than $9 billion, including $1.2 billion in loans, $6.6 billion in long-term rental obligations term, nearly $1 billion in unpaid bills from medical vendors and suppliers and $290 million in bonds. unpaid wages and benefits.
Schrock said Steward has real value, despite being $9 billion in debt. The company had annual sales of $6 billion before filing for bankruptcy and is considering selling its physician group, Stewardship Health Care, to UnitedHealth subsidiary Optum Care for an amount that would repay the company’s loans. company and would allow it to pay part of its expenses. its sellers, Schrock said.
Steward had hoped to use the proceeds from this sale to avoid bankruptcy. But the impasse in obtaining regulatory approvals forced the company to seek short-term emergency financing that didn’t give Steward enough cash to continue operations for long, Schrock said.
“It never really stabilized the business,” Schrock said. “The company was always on the verge of running out of cash.”
At Tuesday’s hearing, Lopez authorized Steward to borrow $75 million from Medical Properties Trust, which owns the real estate where Steward’s hospitals are located and which owes $6.6 billion on leases up to in 2041. Steward hopes to borrow an additional $225 million from Medical Properties Trust. later in his bankruptcy.
Steward is putting all of its hospitals up for sale. It plans to hold auctions on June 28 for its hospitals outside Florida and on July 30 for its nine hospitals in Florida. Schrock said those deadlines were negotiated as part of the new $75 million bankruptcy loan and that Steward would seek more time to sell its hospitals if necessary.
“What we don’t want is a sharp sale of assets,” Schrock said. “There’s a lot of value here.”
(Reporting by Dietrich Knauth, editing by Alexia Garamfalvi and Michael Ernab)
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