Steward Health Care Reaches Agreement with Medical Properties Trust

Strategic Insights -

Steward Health Care, the largest physician-led, minority-owned, integrated healthcare system in the country, has announced an agreement in principle with its landlord, Medical Properties Trust, Inc. (MPT), and the "FILO" secured lenders under its funded debt. The agreement ensures continuity of patient care and retention of the workforce by allowing MPT to fund and take over existing operations of the hospitals, and Steward to retain proceeds from the sale of its "Space Coast" hospitals in Florida to pay lenders and creditors.

Key Takeaways:

  • The agreement will keep the majority of Steward's hospitals open across its footprint, ensuring continuity of patient care and retention of its dedicated workforce.
  • MPT will fund and take over existing operations of the hospitals, and make payments to lenders and creditors with proceeds from the transactions.
  • Steward will retain proceeds from the sale of its "Space Coast" hospitals in Florida to pay lenders and creditors.
  • The agreement marks a pivotal point in Steward's chapter 11 process, allowing the healthcare system to focus on formulating a confirmable chapter 11 plan.
  • The settlement achieves a major milestone in Steward's chapter 11 efforts, providing stability for its valued workforce with nearly 30,000 jobs retained and a potential recovery for general unsecured creditors.
  • Dr. Ralph de la Torre, Chief Executive Officer of Steward Health Care, praised the agreement, stating it is a "crucial and positive development" in the ongoing effort to transition Steward hospitals to new operators and support patients, employees, and the communities served.

Statistics:

  • Steward Health Care will retain nearly 30,000 jobs across its workforce.
  • The agreement provides for the transfer of hospitals governed by MPT's master lease to new interim operators.
  • MPT will become fully responsible for all related operational expenses for the transferred hospitals.
  • Steward Health Care is seeking approval from the court on the settlement agreement as soon as possible, with a possible hearing on September 10, 2024.
  • The agreement marks a major milestone in Steward's chapter 11 efforts, achieving a significant development in the transition of hospitals to new operators.

Sources:

  • Steward Health Care
  • Contify.com (2017)