Steward Health Care Files For Chapter 11 Bankruptcy Protection

(RTTNews) - Steward Health Care System, a privately held firm and a tenant of Medical Properties Trust, Inc. (MPW), said on Monday that it has filed for bankruptcy protection under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas.

The company has cited higher costs, including labor, material, and operation, insufficient reimbursement by Government payors, continued impact of Covid-19, and others as the major reasons for the move.

As part of the filing, the company is finalizing the terms of debtor-in-possession financing from Medical Properties Trust for initial funding of $75 million and up to an additional $225 million.

MPW was trading down by 18.89 percent at $3.95 in the pre-market trade in New York.

Steward has been facing significant financial challenges. In January 2024, Medical Properties Trust had stated that Steward owes about $50 million in unpaid rent to MPW.

Ralph de la Torre, CEO of Steward, said: "In the past several months we have secured bridge financing and progressed the sale of our Stewardship Health business in order to help stabilize operations at all of our hospitals. With the delay in closing of the Stewardship Health transaction, Steward was forced to seek alternative methods of bridging its operations."

With this filing, Steward does not expect any interruptions in its day-to-day operations, which will continue in the ordinary course throughout the Chapter 11 process.