Steward Health Care System LLC Files for Bankruptcy, Secures Rescue Loan

Steward Health Care System LLC, a Massachusetts-based firm operating 33 community hospitals in nine US states, has filed for bankruptcy as it faces financial struggles. The company, with over 30,000 employees, sought Chapter 11 protection in the Southern District Court of Texas, listing assets and liabilities of $1 billion to $10 billion.

In a bid to rescue Steward Health, landlord Medical Properties Trust Inc. is finalizing a rescue loan, providing initial debtor-in-possession funding of $75 million debt and a potential additional loan of up to $225 million. Medical Properties had previously provided a $60 million bridge loan to Steward Health in January.

Steward Health’s Chief Executive Officer, Ralph de la Torre, cited higher costs and insufficient reimbursement by government payors as factors leading to the bankruptcy filing. The delay in the sale of its physician business unit also contributed to the need for alternative funding.

Despite the bankruptcy filing, de la Torre reassured that Steward Health will continue to operate and provide care to patients during the restructuring process. The company aims to responsibly transition ownership of its hospitals and ensure the continued care and service of its patients and communities.

Medical Properties Trust Inc. saw an 18% drop in premarket trading following the news of Steward Health’s bankruptcy filing. The case is being handled in the US Bankruptcy Court for the Southern District Court of Texas.

The filing of bankruptcy by Steward Health Care System LLC highlights the challenges faced by healthcare providers in the current economic climate and the importance of financial stability in the industry.