Steward Health Seeks Financial Respite Through Chapter 11 Filing

Steward Health Care System LLC filed for Chapter 11 bankruptcy on May 6 amid efforts to secure a rescue loan with its landlord, Medical Properties Trust Inc.

Private equity firm Cerberus Capital Management created Steward after acquiring six Catholic hospitals in 2010 but has since sold its interest to the company’s doctors.

The Texas-based healthcare provider, which operates over 30 hospitals across nine U.S. states, declared assets and liabilities between $1 billion and $10 billion, allowing it to continue operations while it restructures.

The bankruptcy filing comes as Steward Health grapples with significant liquidity issues. Medical Properties Trust agreed to provide an initial $75 million and may extend up to $225 million under certain conditions. Shares of Medical Properties Trust have fallen by 13.41%, from $4.92 at the close of trading on May 3 to $4.26 as of 11:23 a.m. EDT on May 8.

Steward Health’s CEO Ralph de la Torre cited escalating costs and insufficient government reimbursements as primary challenges.

For more information, read the full article on Bloomberg.