Dietrich Knauth
NEW YORK (Reuters) – Steward Health, which operates 31 hospitals in eight U.S. states, filed for Chapter 11 bankruptcy in Texas on Monday as it seeks new credit from its landlord Medical Properties (NYSE:) Trust.
Steward, the largest private, for-profit, physician-owned healthcare network in the United States, said it will continue to serve patients as usual during its bankruptcy.
Steward will seek up to $300 million in financing from Medical Properties Trust after it failed to quickly close the sale of its physician group to Stewardship Health. The company is asking for $75 million to begin bankruptcy proceedings, and up to $225 million later.
“Due to the delay in closing the Stewardship Health transaction, Steward was forced to seek alternative methods to combine its operations,” Steward CEO Ralph de la Torre said Monday.
“With additional funding in this process, we are confident that we will keep hospitals open, stocked and operational to ensure our care for our patients and our employees continues,” de la Torre added in a statement.
Steward has 4,500 primary and specialty care physicians, 3,600 staffed beds and nearly 30,000 employees. Steward Health Care cares for more than two million patients annually.
The company recently closed a hospital in Massachusetts. Government officials and politicians said the company did not disclose the extent of its financial problems until they became so deep that they threatened health care at the eight remaining hospitals it operates in the commonwealth.
Massachusetts Gov. Maura Healey said at a news conference Monday that her team is working to minimize the bankruptcy’s impact on patients and she would support an orderly bankruptcy sale away from Steward’s “failed management team.”
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“Ultimately, this is a step toward our goal of getting Steward out of Massachusetts,” Healy said.
Steward’s court-supervised bankruptcy will bring transparency to the company’s finances so its “failed management team” will “no longer be able to lie” about its debts, the governor added.
Steward filed for bankruptcy with liabilities ranging from $1 billion to $10 billion, according to a Chapter 11 petition filed in bankruptcy court in Houston, Texas.