Steward seeking buyers for its 31 hospitals, lays out timeline for sale
After filing for Chapter 11 bankruptcy earlier this month, Steward Health Care is looking for a buyer for all 31 of its hospitals and physician practices across eight states.
In updated filings submitted to the U.S. Bankruptcy Court for the Southern District of Texas, Steward has set a bidding deadline for potential buyers of June 24, with an auction to take place on June 27.
The new emergency motion comes after a May 6 statement where Steward said it was working to finalize a restructuring deal, one that would allow for an influx of funds from its landlord, Medical Properties Trust. An additional $225 million was said to be possible if Steward was able to meet certain benchmarks.
Now it seems like the health system is closing up shop.
The financial woes of Steward were revealed earlier this year, with the organization reportedly $50 million behind on rent to its part-owner Medical Properties Trust. The company is primarily physician-owned, the largest such for-profit healthcare delivery organization in the country by patient volume. However, the organization was previously owned by private equity firm Cerberus Capital Management, which reportedly earned $800 million in profit from its stake.
In its statement, Steward said the bankruptcy filing is a result of “challenges created by insufficient reimbursement by government payors as a result of decreasing reimbursement rates while at the same time facing skyrocketing labor costs, increased material and operational costs due to inflation, and the continued impacts of the COVID-19 pandemic.”
For now, the health system is still treating all patients without interruption and has not announced layoffs for any of its 40,000 employees. Steward serves 12 million patients annually.
A hearing to approve the potential sales of its hospitals and practices is scheduled for July 2.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.