Steward Health Care Files for Bankruptcy with Over $1 Billion in Assets and Liabilities
Steward Health Care System LLC filed for bankruptcy on Monday, seeking Chapter 11 protection in the Southern District Court of Texas. The Massachusetts-based firm has assets and liabilities worth between $1 billion to $10 billion and is looking for a restructuring plan.
The company, which operates 33 community hospitals in nine US states with more than 30,000 employees, has been struggling with its liquidity in recent months. As part of the restructuring deal, Medical Properties is set to provide initial debtor-in-possession funding of $75 million debt and an additional loan of up to $225 million if certain conditions are met. In January, Medical Properties provided Steward Health with a $60 million bridge loan and deferred some of its rent arrears.
Medical Properties fell 18% in premarket trading to $4 as of 6:30 a.m. New York time. Steward Health’s Chief Executive Officer cited higher costs and “insufficient reimbursement by government payors” among the factors leading to the Chapter 11 filing. The delay in the sale of its physician business unit forced it to look for an alternative source of funding.
The bankruptcy process will allow Steward Health to keep operating while it works towards finding a solution for its financial problems. The CEO stated that this process will better position them to transition ownership of their Massachusetts-based hospitals while keeping all their hospitals open to treat patients and ensuring continued care and service for their communities. The case number for this case is Steward Health Care Holdings LLC, 24-90212, US Bankruptcy Court for the Southern District Court of Texas.
