Bankrupt Steward Health to close two Massachusetts hospitals

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Bankrupt Steward Health to close two Massachusetts hospitals

By Dietrich Knauth

NEW YORK (Reuters) – Bankrupt hospital owner Steward Health Care will close two locations in Massachusetts after failing to find a buyer for them, the company said Friday.

Steward filed for bankruptcy in May, putting all of its 31 hospitals up for ***** in an effort to address its $9 billion debt.

Steward has lined up buyers for some of its properties, but it received no bids for Carney Hospital in Boston or Nashoba Valley Medical Center in Ayer, Massachusetts. Both hospitals are expected to close by the end of August, Steward said.

“This is a challenging and unfortunate situation, and the effect it will have on our patients, our employees, and the communities we serve is regrettable,” Steward said Friday.

Steward previously told the judge overseeing its bankruptcy restructuring that it hoped to keep all facilities open while transitioning them to new owners.

The announcement was met with swift criticism from Massachusetts politicians, including Governor Maura Healey and Senator Elizabeth Warren, both Democrats.

Healey blamed Steward CEO Ralph de la Torre’s “greed and mismanagement” for the closures, saying that the state is prepared to help patients and employees transition to new hospitals.

“These hospitals have long served their communities – their closures are about more than the loss of beds, doctors, and nurses,” Healey said.

De la Torre could not immediately be reached for comment.

Warren said the closures are a “direct consequence of looting by Steward executives, private equity investors, and corporate landlords at the expense of patients, health care workers, and Massachusetts communities.”

Steward, which was owned by private equity firm Cerberus Capital Management until 2020, previously sold the land under its hospitals to a real estate company, saddling the company with over $6.6 billion in long-term rent obligations and leaving the company on shaky financial footing.

A U.S. Senate committee issued a subpoena to de la Torre Thursday, requiring him to testify about Steward’s decline at a public hearing on September 12.

Steward said it would cooperate with the subpoena, and that its bankruptcy would provide an additional layer of oversight to assure stakeholders that all Steward hospitals are safe for patient care.

“We understand the ******* for increased transparency around our journey and path forward,” Steward said in a statement.

(Reporting by Dietrich Knauth, Editing by Alexia Garamfalvi and Diane Craft)

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