News: Steward Healthcare files for bankruptcy protection

CDI Strategies - Volume 18, Issue 19

Steward Healthcare, a Dallas-based company that operates more than 30 hospitals nationwide, has filed for financial relief under Chapter 11 of the U.S. Bankruptcy Code in the Southern District of Texas, according to MedPage Today.

“The Company is finalizing the terms of debtor-in-possession financing from Medical Properties Trust for initial funding of $75 million and up to an additional $225 million upon the satisfaction of certain conditions acceptable to Medical Properties Trust,” Steward said in a recent press release.

Steward CEO Ralph de la Torre, MD, explained the decision to seek bankruptcy protections in a press release, arguing that Steward Health Care has “done everything in its power to operate successfully” in a “highly challenging healthcare environment” and that “[f]iling for Chapter 11 restructuring is in the best interests of [Steward’s] patients, physicians, employees, and communities at this time.”

The decision has prompted a wide range of backlash from prominent congresspeople and governors. For instance, U.S. Senators Elizabeth Warren (D-Mass) and Ed Markey (D-Mass) accused Steward’s private equity owners of having “sold [Steward] for parts,” and “walk[ing] away with hundreds of millions of dollars.”

Governor Maura Healey (D-Mass) also issued a condemnatory statement against Steward’s executive management: "This situation stems from and is rooted in greed, mismanagement, and lack of transparency on the part of Steward leadership in Dallas, Texas. It's a situation that should never have happened and we'll be working together to take steps to make sure this never happens again."

Editor’s note: To read the MedPage Today coverage, click here. To read the Steward press release, click here.

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