Steward Health Care System LLC, a Massachusetts-based healthcare company, filed for bankruptcy on Monday as it finalizes a rescue loan with its landlord, Medical Properties Trust Inc. The company has been struggling with its liquidity in recent months and sought Chapter 11 protection in the Southern District Court of Texas. Steward Health lists assets and liabilities between $1 billion to $10 billion.
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.
The CEO of Steward Health 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.
In the bankruptcy process, Steward will be better positioned to responsibly transition ownership of its Massachusetts-based hospitals, keep all of its hospitals open to treat patients, and ensure the continued care and service of our patients and our communities,” said the CEO. The case is Steward Health Care Holdings LLC, 24-90212, US Bankruptcy Court for the Southern District Court of Texas.