Steward Health Care and Medical Properties Trust Reach Settlement Agreement, Paving Way for Transition of Hospitals to New Ownership

Strategic Insights -

Steward Health Care, the country's largest physician-led, minority-owned, integrated healthcare system, has announced that it has reached an agreement in principle with its landlord, Medical Properties Trust, Inc. (MPT), allowing for the transfer of hospitals to new interim operators. The agreement, which has been supported by the FILO secured lenders under MPT's funded debt and the official committee of unsecured creditors, will see MPT become fully responsible for operational expenses related to the transferred hospitals. This settlement is a major milestone in Steward's chapter 11 efforts and will support continuity of patient care, stability for the workforce, and a potential recovery for general unsecured creditors.

Key Takeaways:

  • Steward Health Care has reached an agreement in principle with Medical Properties Trust, Inc. (MPT) to transfer hospitals to new interim operators.
  • The agreement has been supported by the FILO secured lenders under MPT's funded debt and the official committee of unsecured creditors.
  • MPT will become fully responsible for operational expenses related to the transferred hospitals.
  • The settlement will support continuity of patient care, stability for the workforce, and a potential recovery for general unsecured creditors.
  • Steward Health Care will retain nearly 30,000 jobs and the sale of its "Space Coast" hospitals in Florida will provide proceeds to pay lenders and creditors.
  • The agreement allows for the transition of six Steward hospitals in Massachusetts and provides a path for keeping the majority of Steward hospitals open.
  • Dr. Ralph de la Torre, Chief Executive Officer of Steward Health Care, stated that the agreement is a crucial and positive development in the company's ongoing effort to transition hospitals to new operators and pay debts.
  • The agreement has been hailed as a major milestone in Steward's chapter 11 efforts and is pending court approval.

Statistics:

  • 30,000: The number of jobs retained by Steward Health Care as a result of the settlement.
  • 6: The number of Steward hospitals in Massachusetts that will be transitioned to new operators.
  • Billions of dollars: The amount of claims held by MPT against Steward that will be released under the agreement.
  • 10 September 2024: The possible hearing date for the court's approval of the settlement agreement.
  • 2024: The year in which the settlement agreement was reached between Steward Health Care and Medical Properties Trust, Inc.

Sources:

  • ENPublishing, "Steward Health Care and Medical Properties Trust Reach Settlement Agreement in Principle" (1 September 2024)
  • M2 Communications, "Steward Health Care and Medical Properties Trust Reach Settlement Agreement in Principle" (1 September 2024)