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Bankrupt Steward Health puts its hospitals up for sale, discloses $9 bln in debt (www.reuters.com)

submitted 6 months ago by [email protected] to c/[email protected]

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Bankrupt Steward Health Care has put all of its 31 U.S. hospitals up for sale, hoping to finalize transactions by the end of the summer to address its $9 billion in total liabilities, its attorneys said at a Tuesday court hearing in Houston.

Steward, which filed for bankruptcy protection on Monday, hopes to keep all of its hospitals open over the long term, Steward attorney Ray Schrock told U.S. Bankruptcy Judge Chris Lopez, who is overseeing the Chapter 11 proceedings.

The privately-owned company closed a hospital in Massachusetts earlier this year, and officials in that state have criticized Steward's management and its former private equity owners for making short-sighted financial decisions that undermined patients' care. Massachusetts officials in particular criticized a series of transactions that sold off the company's real estate and saddled it with long-term rent costs at its hospitals.

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[–] [email protected] 61 points 6 months ago (3 children)

... officials in that state have criticized Steward's management and its former private equity owners for making short-sighted financial decisions that undermined patients' care. Massachusetts officials in particular criticized a series of transactions that sold off the company's real estate and saddled it with long-term rent costs at its hospitals.

There should be a law banning private equity firms from owning hospitals or LTC homes, because all those firms do is strip them of their assets and raze them to the ground.

[–] [email protected] 48 points 6 months ago (2 children)

Yeah. Business Insider had a good long read on that. I think it was posted before, but it's worth reading.

In addition to their financial struggles, all of the hospitals shared three things in common. They all served low-income communities that suffered from a lack of access to healthcare. They were all owned at various points by for-profit investors, including leading private-equity firms like Cerberus, Leonard Green, and Apollo. And in a move that stripped the hospitals of one of their prime assets, the owners had sold the land beneath the facilities to a little-known real-estate investor called Medical Properties Trust. MPT, which has purchased some $16 billion of hospital real estate over the past two decades, now bills itself as one of the world's largest owners of hospital beds.

For many of the hospitals, the deals proved disastrous. Once their real estate was sold to MPT, they were forced to pay rent on what had always been their own property. That added to the massive debt burdens already placed on the hospitals by their for-profit owners, deepening their financial woes. It also deprived Americans of desperately needed healthcare and put lives at risk — all while enriching some of the world's wealthiest investors.

[–] [email protected] 21 points 6 months ago (1 children)

I don't see how this isn't a fraud on the same level as Enron. There is no way that MPT was an arm's length third party when literally everyone of Steward's hospitals was entering into leaseback agreements with them. The system is fucking broken and it's goddamn shameful. They are doing this with vital services which will cause communities untold suffering and has already resulted in loss of human life if you read up on their mismanagement of the hospitals.

[–] [email protected] 7 points 6 months ago* (last edited 6 months ago)

Shameful is putting it lightly…

Investors at Cerberus, meanwhile, aren't the only ones who scored a home run by inflicting financial pain on Steward. In 2021, MPT loaned the hospital chain's operating team, including de la Torre, $335 million to buy out Cerberus. Steward then turned around and paid its new owners, including de la Torre, a dividend of about $100 million. A few months later, de la Torre bought a $40 million yacht named the Amaral, which features a library, a gym, and a whirlpool on the top deck. Just after that, Steward filed with the government to delay paying back pandemic-era loans, citing "extreme financial hardship."

[–] [email protected] 20 points 6 months ago (1 children)

That's the dumbest fucking thing I've read all day.

[–] [email protected] 3 points 6 months ago

Living up to your name I see.

[–] [email protected] 19 points 6 months ago* (last edited 6 months ago)

there should be a law banning private equity firms

FTFY

[–] [email protected] 5 points 6 months ago

All private equity is doing is basically a corporational cannibalism.