(Bloomberg) — Bankrupt Steward Health Care has reached an agreement in principle with its landlord Medical Properties Trust Inc. to resolve billions of dollars of lease obligations that would provide a path toward keeping most of its hospitals open.
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Steward said Friday that MPT has agreed to take over its existing hospitals and cover the operational expenses of the medical centers. The deal, which must be approved by a bankruptcy judge, is supported by Steward’s secured lenders, and a committee of the hospital operator’s unsecured creditors.
The agreement would make MPT “fully responsible for all related operational expenses” once the hospitals are transferred, Steward said. The deal covers hospitals that are subject to the landlord’s master lease.
The parties have also resolved to settle a dispute over lease obligations, including the release “of billions of dollars in claims MPT holds against Steward,” according to the statement.
The deal was disclosed a day after Steward said it had found buyers for its six Massachusetts hospitals. A judge may consider the approval of the agreement next month, Steward said, adding that it would engage with key stakeholders on the terms of a Chapter 11 repayment plan if the deal takes effect.
Steward filed Chapter 11 in May and has been working to sell its hospitals to new owners. The company operates about 30 hospitals in Florida, Massachusetts, Texas and other states.
The bankruptcy case is Steward Health Care System LLC, 24-90213, US Bankruptcy Court for the Southern District Court of Texas.
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