DALLAS--(BUSINESS WIRE)--Steward Health Care (“Steward”), the country’s largest physician-led, minority-owned, integrated health care system, announced today it has reached an agreement in principle with its landlord, Medical Properties Trust, Inc. (“MPT”), supported by the “FILO” secured lenders under its funded debt and the official committee of unsecured creditors.
Following Bankruptcy Court approval, the agreement allows for the transfer of hospitals that are governed by MPT’s master lease to new interim operators and the funding of ongoing operational costs by MPT. Additionally, Steward and MPT have agreed to the mutual release of all claims on secured lease obligations between them, including the release of billions of dollars of claims held by MPT against Steward. Upon transferring Steward’s interests in these hospitals, MPT will become fully responsible for all related operational expenses, and Steward will be well positioned to advance towards effectively and efficiently administering the balance of their chapter 11 cases and providing recoveries to creditors. Additionally, the global agreement provides for Steward’s retention of proceeds from the sale of its “Space Coast” hospitals located in Florida to pay lenders and creditors.
Steward is seeking approval from the court on the settlement agreement as soon as possible with a possible hearing on September 10, 2024.
This settlement achieves a major milestone in Steward’s chapter 11 efforts and, together with the binding agreements reached for the transition of six Steward hospitals in Massachusetts, supports continuity of patient care by establishing a path for keeping the majority of Steward hospitals open, provides stability for its valued workforce by retaining nearly 30,000 jobs and a potential recovery for general unsecured creditors, avoiding contentious and costly litigation.
“This is a crucial and positive development today in our ongoing effort to transition Steward hospitals to new operators, pay Steward's debts, and support our patients, employees, and the communities we have had the privilege of serving for many years,” said Dr. Ralph de la Torre, Chief Executive Officer of Steward Health Care. “After exhaustive, round-the-clock efforts by all parties, we are extremely pleased that this potential agreement creates a path that we hope will enable all remaining Steward hospitals to stay open and allows our dedicated staff of providers and others to devote their full attention to patient care.”
The agreement marks a pivotal point in the chapter 11 process and pending approval from the Bankruptcy Court, Steward, with the oversight of the Transformation Committee, will engage with key stakeholders in connection with formulating the terms of a confirmable chapter 11 plan.
Additional information is available at www.steward.org.