Steward Health is part of Cerberus Capital Management who has been buying up quite a few hospitals of late, especially in the Massachusetts area and a couple outside of the state. After dumping $50 million with the filing Steward will be making the purchase. Steward was not willing to take on the debt so it was either file bankruptcy or close down the facility. Several million will be spent by Steward for upgrades and so forth. All the bond holders and unsecured creditors such as doctors groups will be not be reimbursed in full, so I wonder how much they will get on the dollar. Here was another recent purchase. One more not profit crosses over to the for profit side. BD
From the Website:
“Cerberus Capital Management, L.P., along with its affiliates, is one of the world's leading private investment firms. Through its team of investment and operations professionals, Cerberus specializes in providing both financial resources and operational expertise to help transform undervalued companies into industry leaders for long-term success and value creation. Cerberus holds controlling or significant minority interests in companies around the world.
Cerberus is headquartered in New York City with affiliate and/or advisory offices in the United States, Europe, the Middle East and Asia.”
Four days after Quincy Medical Center trustees approved a deal for it to be acquired by Steward Health Care System, the hospital today filed for bankruptcy protection in a bid to dump more than $50 million in debt before the sale.
The 196-bed hospital had not previously disclosed its plans to restructure in US Bankruptcy Court. Last month, it failed to make a monthly payment to bondholders on about $56 million it borrowed four years ago to finance renovations and a new power plant.
Quincy Medical Center trustee Richard P. Barry said the bankruptcy filing is necessary because neither Steward nor other potential buyers identified by a consulting firm, Navigant Capital Advisors, were willing to invest enough money to pay off the hospital’s debts.