Bankrupt Steward Health Care has decided to sell all 31 of its US hospitals in an effort to address its $9 billion in total liabilities. The company, which filed for bankruptcy protection, aims to finalize these transactions by the end of the summer while keeping all hospitals open over the long term. Steward’s attorney emphasized their goal of ensuring that none of the communities served by these hospitals are left without care, despite the change in ownership that may occur.
Amid criticism in Massachusetts for making short-sighted financial decisions, Steward faces substantial liabilities, including loans, long-term rent obligations, unpaid bills, and employee wages. Despite this heavy debt load, the company has $6 billion in annual revenue and is pursuing the sale of its physician group to UnitedHealth subsidiary Optum Care, in hopes of repaying loans and paying off vendors. Steward had initially planned to use the proceeds from this sale to avoid bankruptcy, but stalled regulatory approvals forced the company to seek emergency financing that ultimately led to their filing.
While presenting their case in court, Steward’s attorney argued that the company has real value, despite its significant debt. The company’s attempt to secure additional financing fell short, leading to the need for a $75 million emergency loan from Medical Properties Trust. Steward also intends to borrow an additional $225 million from the same trust later in the bankruptcy process to stay afloat and continue operations.
Steward is holding auctions for its hospitals outside of Florida on June 28 and for its nine hospitals in Florida on July 30. These timelines were negotiated as part of the bankruptcy loan agreement, with the possibility of seeking more time if needed. The company emphasizes that they do not want to liquidate assets in a fire sale, as they believe there is significant value in their hospital network. Despite the challenges faced in the bankruptcy process, Steward remains focused on keeping its hospitals operational and serving the communities they are located in.
Overall, Steward Health Care’s decision to sell all of its hospitals marks a significant shift in the company’s operations as they address their financial challenges. Despite the heavy debt burden, Steward remains optimistic about the value of their assets and the potential for a successful sale process. The company’s commitment to keeping its hospitals open and serving their communities underscores their dedication to providing quality healthcare, even in the face of bankruptcy proceedings. The outcome of the hospital sales and the impact on Steward Health Care’s future will be closely monitored as the bankruptcy process unfolds.