Bankrupt Steward Well being Care has put all of its 31 US hospitals up for sale, hoping to finalize transactions by the tip of the summer season to handle its $9 billion in whole liabilities, its attorneys mentioned at a Tuesday court docket listening to in Houston.
Steward, which filed for chapter safety on Monday, hopes to maintain all of its hospitals open over the long run, Steward lawyer Ray Schrock informed US Chapter Decide Chris Lopez, who’s overseeing the Chapter 11 proceedings.
“Our objective stays that there are zero hospitals closed on our watch,” Schrock mentioned. “There’s going to be a change in possession in lots of hospitals, we acknowledge that. However we don’t wish to see any of those communities fail to be served.”
The privately owned firm closed a hospital in Massachusetts earlier this 12 months, and officers in that state have criticized Steward’s administration and its former personal fairness house owners for making short-sighted monetary choices that undermined sufferers’ care. Massachusetts officers specifically criticized a collection of transactions that offered off the corporate’s actual property and saddled it with long-term lease prices at its hospitals.
In court docket paperwork filed earlier than the listening to, Steward mentioned it had over $9 billion in whole liabilities, together with $1.2 billion in loans, $6.6 billion in long-term lease obligations, practically $1 billion in unpaid payments from medical distributors and suppliers, and $290 million in unpaid worker wages and advantages.
Schrock mentioned Steward has actual worth, regardless of carrying a $9 billion debt load. The corporate had $6 billion in annual income earlier than submitting for chapter, and it has been pursuing a sale of its doctor group, Stewardship Well being Care, to UnitedHealth subsidiary Optum Take care of an quantity that will repay the corporate’s loans and permit it to pay a few of its distributors, Schrock mentioned.
Steward had hoped to make use of the proceeds of that sale to keep away from chapter. However stalled regulatory approvals pressured the corporate to hunt short-term emergency financing that didn’t give Steward sufficient money to proceed operations for lengthy, Schrock mentioned.
“It by no means actually stabilized the corporate,” Schrock mentioned. “The corporate was at all times very near working out of money.”
At Tuesday’s listening to, Lopez allowed Steward to borrow $75 million from Medical Properties Belief, which owns the actual property the place Steward’s hospitals are positioned and is owed $6.6 billion on leases that run till 2041. Steward hopes to borrow an extra $225 million from Medical Properties Belief later in its chapter.
Steward is placing all of its hospitals up for sale. It intends to maintain auctions on June 28 for its hospitals exterior of Florida and July 30 for its 9 hospitals in Florida. Schrock mentioned these timelines had been negotiated as a part of the brand new $75 million chapter mortgage, and that Steward would search extra time to promote its hospitals if mandatory.
“What we don’t wish to do is have a hearth sale of the property,” Schrock mentioned. “There’s a whole lot of worth right here.”