BOSTON — A Texas bankruptcy judge on Thursday is set to consider a plan to transfer ownership of several of Steward's Health Care System hospitals and the seizure of another facility by the state government. Gov. Maura Healey announced on Friday that Lawrence General Hospital would take over Holy Family Hospital in Haverhill and Methuen while Lifespan, a Rhode Island-based company, would buy Morton Hospital in Taunton and St.
Anne’s Hospital in Fall River. Healey also said the state will take over St. Elizabeth’s Hospital in Brighton by eminent domain until it can be placed under the Boston Medical Center as its new owner.
The plan, details of which haven't been released, needs to be approved by U.S. Bankruptcy Judge Christopher Lopez, who is overseeing the company's Chapter 11 proceedings.
The hearing is set for Thursday at 2 p.m. in his Texas courtroom.
The move comes in response to the Texas based company's delays in finalizing plans for the sale of its hospitals in the state as part of the bankruptcy proceedings, which has drawn scrutiny from Healey and other state leaders. Steward has delayed that sales hearing at least five times. Steward plans to put its 31 U.
S. hospitals up for sale to pay down $9 billion in outstanding liabilities owed to creditors. The company filed for federal bankruptcy protections in May.
The company plans to close its hospitals in Dorchester and Ayer after failing to reach adequate terms with prospective buyers. The pending sale of the other hospitals won’t impact the pending closure of those two facilities by the end of the month. Steward’s management cited an increase in operating costs and insufficient federal government-program reimbursement among the factors leading to the Chapter 11 bankruptcy filing.
But Healey and other state leaders have blamed "greed and mismanagement" by Steward’s management, including CEO Ralph de la Torre, and say the transfer of ownership from the Texas-based company will improve the state’s hospital system. De la Torre is under a congressional subpoena to appear before an oversight committee, when he is expected to be grilled by lawmakers about his mismanagement of the bankrupt company and his lavish lifestyle that included the purchase of a $15 million luxury yacht. Meanwhile, Steward and its Massachusetts landlords are trading barbs in court over who is to blame for the delays in finalizing the sale of its hospital properties.
In a court filing on Monday, Steward accused Medical Properties Trust of putting their thumbs on the scales to increase the value of interests in the real estate under the hospitals. It claims the property owners have "attempted to undermine" the process by communicating with companies bidding on Steward's properties, without its written consent. But Steward's landlords fired back, claiming in a court filing that the inability to secure favorable terms for the sale of their hospitals is a result of Steward's stalling tactics to get more money out of the deals.
"In reality, it is the debtors who have prevented sales from going forward, not to protect public health or the like but to attempt to force MPT to transfer real-estate value to the Debtors and their lenders as the price of allowing sales to go forward that are necessary to avoid closures," lawyers for MPT wrote in the legal filing. Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites.
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