Steward Health Care Puts All 31 Hospitals up for Sale to Address $9 Billion Debt After Filing for Bankruptcy

By Trisha Andrada

May 08, 2024 05:07 AM EDT

Steward Health Care has reportedly listed all its 31 hospitals in the United States for sale to pay off its $9 billion debt. This move follows the company's filing for bankruptcy protection on Monday.

Steward Health Care Commits to Ensuring the Long-Term Viability of All Its Hospitals

During a court hearing in Houston on Tuesday, US Bankruptcy Judge Chris Lopez, who oversees the Chapter 11 proceedings, authorized a $75 million loan to Steward Health Care from Medical Properties Trust, which owns the property where Steward's hospitals are situated.

Steward attorney Ray Schrock told Lopez that the business still plans to maintain all of its hospitals operational in the future.

"Our goal remains that there are zero hospitals closed on our watch... There's going to be a change in ownership in many hospitals. But we don't want to see any of these communities fail to be served," Schrock said, as CNN reported.

Steward also intends to borrow an extra $225 million from the Medical Properties Trust in the final stages of its bankruptcy. All of Steward's healthcare facilities are now on sale. It plans to hold auctions for its hospitals outside of Florida on June 28 and its nine hospitals in Florida on July 30.

According to Schrock, the timetables were part of the new $75 million bankruptcy loan negotiations, and Steward may ask for more time to sell its hospitals if needed.

Massachusetts Officials Criticize Steward Health Care's Management and Previous Private Equity Investors

After the company closed a hospital in Massachusetts earlier this year, Steward Health Care's management and previous private equity investors received criticism from state officials, questioning a series of transactions that sold the firm's real estate and caused long-term rent bills at its hospitals.

Before the hearing, Steward submitted court papers stating it was liable for more than $9 billion. It included $1.2 billion in loans, $6.6 billion in long-term rent, nearly $1 billion in outstanding bills from medical vendors and suppliers, and $290 million in unpaid wages and benefits of employees.

Despite Steward's $9 billion debt load, Schrock claimed the privately owned company has real value. He said it had $6 billion in annual revenue before it filed for bankruptcy.