Steward Health Care announced late Wednesday night that it was again postponing a public sale hearing for its Massachusetts hospital, this time to next Thursday.
“The sale hearing for the Debtor Hospitals in Arkansas, Louisiana and Massachusetts, originally scheduled for August 16, 2024 at 10:00 a.m. CST, is postponed to August 22, 2024 at 1:00 p.m. CST,” the company said in a late-night U.S. Bankruptcy Court filing.
Steward said it had received bids for five hospitals on six campuses in Massachusetts, but has not yet disclosed the identities of the bidders or details of the proposals presented. The latest in a series of delays came the same week that the bankrupt company announced it had “reach a definitive agreement” to sell its physician network to a Tennessee-based subsidiary of a New York private equity firm for $245 million in cash. The deal is awaiting court approval at a hearing this Friday at 10 a.m. Central time, the filing said.
The company has already received court approval to close Kearney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer, but officials told the court it has “received binding bids from local operators to acquire six hospitals in Massachusetts, including St. Elizabeth Medical Center, St. Ann's Hospital, Good Samaritan Medical Center, Holy Family Hospital – Haverhill, Holy Family Hospital – Methuen and Morton Hospital.”
The Massachusetts government has a deal with Steward to make an upfront Medicaid payment of $30 million to keep the state's hospitals open through August, but officials did not respond to questions this week about whether any payments had been made or would be made under the terms of that deal. The state government has demanded that Steward execute a “hospital operations and land acquisition agreement” for the Massachusetts hospitals by Aug. 9 and that the bankruptcy court approve the sale by Aug. 15.
Instead, the Department of Health and Human Services said Monday it was disappointed that asset purchase agreements had not yet been signed at that time for the remaining five hospitals up for sale.
Also Monday, the U.S. Department of Justice filed objections at a postponed hearing this Friday regarding Steward's original plan to seek court approval for the sale of Stewardship Health and several of its hospitals in three states.
In @Issue, we discuss the crisis at Steward Healthcare, including the announcement that two Massachusetts hospitals will be closing, and the ripple effects it is having on the state.
The federal government “opposes the proposed sale to the extent it seeks to transfer the Debtors' Medicare Part A provider contracts in violation of applicable federal law,” the filing said.The Justice Department indicated it filed the objection and reservation of rights because Steward has not yet revealed the identities of the companies that bid for the hospitals it plans to sell.
“Pursuant to the Bid Procedure Order, the Debtors were to disclose the results of the auction, including the successful bidder and the material terms of the proposed sale, on August 7, 2024. As of this filing, the Debtors have not disclosed the successful bidder in the proposed sale or filed a proposed order or asset purchase agreement setting forth the terms of the proposed sale pursuant to the Bid Procedure Order,” the Department wrote.
The court-approved procedures that Steward must follow during the bankruptcy sale process provide that “the sale hearing may be postponed or rescheduled by order of the bankruptcy court or by order of the debtor following consultation with the conferring parties, but without any notice to creditors and interested parties other than the debtor's announcement of the postponement date at the sale hearing.”
