Struggling Steward Health Corporation puts their hospitals on the market, revealing $9 billion of liabilities.
The struggling healthcare provider, Steward Health Care, is putting all its 31 hospitals up for sale in a bid to resolve its massive $9 billion in liabilities within the summer. The announcement was made at a court hearing in Houston by the company's attorneys. They emphasized that their aim is to help all these hospitals continue operating and maintain services to the communities, even if there's a change of ownership.
Steward had already shut down one hospital in Massachusetts earlier this year, eliciting criticism from state officials over poor management and prior actions taken by its previous private equity owners. These past decisions allegedly compromised patient care.
The company listed its debts in court documents prior to the hearing, including about $1.2 billion in loans, $6.6 billion in long-term rent commitments, $991 million in unpaid medical vendor and supplier bills, and $290 million in unpaid wages and employee benefits.
Despite bearing a $9 billion debt load, Steward remained convinced of its worth. Schrock, a representative for Steward, shared that the company had an annual revenue of $6 billion before filing for bankruptcy, and was close to sealing a deal for the sale of its physician group, Stewardship Health Care, to Optum Care, a UnitedHealth subsidiary, to repay its loans and reimburse some of its vendors.
Steward had hoped to avoid bankruptcy by utilizing the money from this sale. However, delayed regulatory approvals led the company to seek emergency financing that was insufficient to keep operations afloat.
Judge Chris Lopez permitted a $75 million loan from Medical Properties Trust, the owner of the real estate where Steward hospitals are located and creditor in a $6.6 billion lease arrangement. Steward anticipates borrowing an extra $225 million more from Medical Properties Trust.
Steward's plan is to auction off its non-Florida hospitals on June 28 and its Florida hospitals on July 30. These dates were agreed upon in negotiations for the initial $75 million loan, although the company may seek a longer sales period if required. Schrock added, "We don't want to have a fire sale of these assets because there is a lot of value here."
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Source: edition.cnn.com
