Hearing At Texas Bankruptcy Court To Determine Timeline For Sale Of Steward Hospitals

A hearing at a Texas bankruptcy court will determine the timeline of the sale of Steward Health Care System’s hospitals.

Steward, which is based in Dallas, owns 31 hospitals across the country, including three locally: Trumbull Memorial Medical Center, Hillside Rehabilitation Hospital and Sharon Regional Hospital.

The company filed for Chapter 11 bankruptcy protection in Texas in May and plans to sell off all of its hospitals.

Steward is proposing a June 24 deadline to make bids on the hospitals, an auction on June 27 and a sale hearing on July 2.

Interested buyers will have to follow the Global Bidding Procedures if this proposal passes. These procedures include stalking horse bids, which are arraigned in advance of an auction intending to maximize the value of the company’s assets.

Steward Health said in its bankruptcy news release that the company is finalizing the terms of debtor-in-possession financing from MPT for initial funding of $75 million and up to an additional $225 million.

In January, First News investigated after the company was having issues paying its rent, as well as some loan obligations. Medical Properties Trust, Inc.— a company that provides working capital for hospitals — said the healthcare system is having issues with vendor payments and collections, impacting its ability to make good on payments. It said that according to third quarter 2023 reports, Steward delayed paying a portion of its September and October rent to MPT, even though Steward obtained “additional working capital financing and selling its non-core laboratory business.”

In April, Steward Health Care was the topic of a Senate subcommittee field hearing in Boston on Wednesday dealing with “corporate greed” in the healthcare sector.

Steward Health Care was previously owned by Cerberus Capital Management, a private equity company that generated $800 million in profit from Steward, according to a news release from Senator Edward J. Markey (D-Mass.).

Steward Health also has hospitals in Arkansas, Arizona, Florida, Louisiana, Massachusetts and Texas.

Source: WKBN 27 News