Medical Properties Trust Inc., a US real estate trust specializing in health care facilities, is prepared to provide a rescue loan of up to $225 million to Steward Health Care System LLC as the Massachusetts-based firm files for bankruptcy. The company, which operates 33 community hospitals in nine US states with over 30,000 employees, has faced liquidity issues recently and sought Chapter 11 protection in the Southern District Court of Texas.
Steward Health’s CEO Ralph de la Torre attributes the bankruptcy filing to higher costs and insufficient reimbursement from government payors. The delay in the sale of its physician business unit led to the search for alternative funding sources. Through the bankruptcy process, Steward will be better positioned to transition ownership of its Massachusetts-based hospitals and ensure continued care and service to communities.
As part of the restructuring agreement, Medical Properties will provide initial debtor-in-possession funding of $75 million in debt and an additional loan of up to $225 million if certain conditions are met. This funding will allow Steward Health to continue operating while it pursues approval for a restructuring plan. The case is filed as Steward Health Care Holdings LLC, with the number 24-90212, in the US Bankruptcy Court for the Southern District Court of Texas.
