(Bloomberg) — Steward Well being Care System LLC filed for chapter early Monday because it’s finalizing a rescue mortgage with landlord Medical Properties Belief Inc.
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The Massachusetts-based agency sought Chapter 11 safety within the Southern District Courtroom of Texas and listed belongings and liabilities of $1 billion to $10 billion. The chapter petition permits Steward Well being to maintain working whereas it seeks approval for a restructuring plan.
The corporate, which operates 33 neighborhood hospitals in 9 US states with greater than 30,000 workers, has been scuffling with its liquidity in current months.
As a part of the restructuring deal, Medical Properties — a US actual property belief centered on well being care services — is ready to supply preliminary debtor-in-possession funding of $75 million debt and an extra mortgage of as a lot as $225 million if sure circumstances are met, it mentioned in an announcement. In January, Medical Properties offered Steward Well being with a $60 million bridge mortgage and deferred a few of its hire arrears.
Medical Properties fell 18% in premarket buying and selling to $4 as of 6:30 a.m. New York time.
Steward Well being’s Chief Government Officer Ralph de la Torre cited larger prices and “inadequate reimbursement by authorities payors” among the many components resulting in the Chapter 11 submitting. The delay within the sale of its doctor enterprise unit Stewardship Well being compelled it to search for an alternate supply of funding.
Within the chapter course of “Steward will likely be higher positioned to responsibly transition possession of its Massachusetts-based hospitals, maintain all of its hospitals open to deal with sufferers, and make sure the continued care and repair of our sufferers and our communities,” de la Torre mentioned.
The case is Steward Well being Care Holdings LLC, 24-90212, US Chapter Courtroom for the Southern District Courtroom of Texas.
–With help from Bre Bradham.
(Updates with Medical Properties premarket buying and selling share value in fifth paragraph.)
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