Bankrupt Steward Health Care Puts All 31 U.S. Hospitals Up for Sale

Bankrupt Steward Health Care Puts All 31 U.S. Hospitals Up for Sale

In a bid to address its staggering $9 billion in total liabilities, bankrupt Steward Health Care has made the decision to put all 31 of its U.S. hospitals up for sale. The company, which filed for bankruptcy protection on Monday, hopes to finalize transactions by the end of the summer, according to its attorneys who spoke at a court hearing in Houston on Tuesday.

Steward’s goal is to keep all of its hospitals open over the long term, with attorney Ray Schrock emphasizing that they do not want to see any communities fail to be served. However, a hospital in Massachusetts was closed earlier this year, drawing criticism from state officials who have accused Steward of making short-sighted financial decisions that have negatively impacted patient care.

Court documents revealed that Steward has over $9 billion in total liabilities, including loans, long-term rent obligations, unpaid bills from vendors, and unpaid employee wages and benefits. Despite this significant debt load, Schrock highlighted the company’s real value, pointing out that Steward had $6 billion in annual revenue before filing for bankruptcy.

Steward had been pursuing a sale of its physician group, Stewardship Health Care, to UnitedHealth subsidiary Optum Care in an effort to avoid bankruptcy. However, regulatory approvals stalled, leading the company to seek emergency financing that was not sufficient to sustain operations in the long term.

During the court hearing, U.S. Bankruptcy Judge Chris Lopez approved a $75 million loan from Medical Properties Trust, with the potential for an additional $225 million loan later in the bankruptcy process. Steward plans to hold auctions for its hospitals on June 28 for those outside of Florida and on July 30 for its nine hospitals in Florida.

Schrock emphasized that Steward does not want to have a “fire sale” of its assets and believes there is significant value in the company. The company will seek more time to sell its hospitals if necessary to ensure a successful transaction.

Overall, Steward Health Care’s decision to put all of its hospitals up for sale marks a significant development in its efforts to address its financial challenges and secure a sustainable future for its operations.