Steward Health Care Finalizing Financing Deal With Medical Properties Trust to Support Its Restructuring
May 06 2024 - 3:39AM
Business Wire
Funds Will Allow All Communities to Continue to
Be Served and Day-to-day Operations to Continue in the Ordinary
Course
Today, Steward Health Care (“the Company”), a national fully
integrated value-based healthcare system and the largest
physician-led hospital operator in the United States, announced
that it has commenced an in-court restructuring process through the
filing of voluntary petitions for relief under Chapter 11 of the
U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern
District of Texas. The Company is finalizing the terms of
debtor-in-possession financing from Medical Properties Trust for
initial funding of $75 million and up to an additional $225 million
upon the satisfaction of certain conditions acceptable to Medical
Properties Trust.
Steward took this voluntary step today as a necessary measure to
allow the Company to continue to provide necessary care to its
patients in their communities without disruption. Steward does not
expect any interruptions in its day-to-day operations, which will
continue in the ordinary course throughout the Chapter 11 process.
Steward’s hospitals, medical centers and physician’s offices are
open and continuing to serve patients and the broader community and
our commitment to our employees will not change.
“Steward Health Care has done everything in its power to operate
successfully in a highly challenging health care environment.
Filing for Chapter 11 restructuring is in the best interests of our
patients, physicians, employees, and communities at this time,”
said Dr. Ralph de la Torre, Chief Executive Officer of Steward. “In
the past several months we have secured bridge financing and
progressed the sale of our Stewardship Health business in order to
help stabilize operations at all of our hospitals. With the delay
in closing of the Stewardship Health transaction, Steward was
forced to seek alternative methods of bridging its operations. With
the additional financing in this process, we are confident that we
will keep hospitals open, supplied, and operating so that our care
of our patients and our employees is maintained. By working
collaboratively with stakeholders in this court-supervised
controlled environment, and having the benefit of our earlier
strategic efforts, 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.”
The other primary factor driving this voluntary Chapter 11 case
is, in large part, due to Steward continuing to face 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. It is Steward’s goal to resolve the Chapter 11 process as
quickly as possible, with the help of the court, with a view to the
long-term and sustainable financial health of the system.
If you have questions about this announcement, you may call the
information line created by the Company (888) 505-1257 (toll free)
or (646) 893-5546 (international). You may also email questions to:
StewardInfo@ra.kroll.com. Court filings and other information
related to the restructuring proceedings are available at a website
administered by the Company’s claims agent, Kroll, at
https://restructuring.ra.kroll.com/Steward.
Weil, Gotshal & Manges LLP is serving as the Company’s legal
counsel. AlixPartners, LLP is providing financial advisory services
to the Company, and John Castellano of AlixPartners is serving as
the Company’s Chief Restructuring Officer. Lazard Frères & Co.
LLC, Leerink Partners LLC, and Cain Brothers, a division of KeyBanc
Capital Markets Inc. are providing investment banking services to
the Company.
About Steward Health Care
Over a decade ago, Steward Health Care System emerged as a
different kind of health care company designed to usher in a new
era of wellness. One that provides our patients better, more
proactive care at a sustainable cost, our providers unrivaled
coordination of care, and our communities greater prosperity and
stability.
As the country’s largest physician-led, minority-owned,
integrated health care system, our doctors can be certain that we
share their interests and those of their patients. Together we are
on a mission to revolutionize the way health care is delivered -
creating healthier lives, thriving communities and a better
world.
Based in Dallas, Steward currently operates more than 30
hospitals across Arizona, Arkansas, Florida, Louisiana,
Massachusetts, Ohio, Pennsylvania, and Texas.
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Josephine Martin, Josephine.Martin@steward.org