Editor's note: This story has been updated to reflect Friday court filings.
Steward Health Care said it has locked in definitive agreements for six of its Massachusetts hospitals.
On Thursday, the bankrupt system announced definitive asset purchase agreements for Lifespan to purchase its Morton Hospital and Saint Anne's Hospital, while Lawrence General Hospital will be buying Holy Family Hospital - Methuen and Holy Family Hospital - Haverhill.
Then, on Friday, Steward shared in a court filing that it also secured a deal for Boston Medical Center to purchase Good Samaritan Medical Center and St. Elizabeth's Medical Center. The filings outline a purchase price of $140 million for Boston Medical Center.
“In Lifespan, Lawrence General Hospital and Boston Medical Center, we have found partners with established track records of treating communities in the northeast United States," John Castellano, chief restructuring officer at Steward, said in the Thursday announcement. "Through these transactions, the people of the Commonwealth will continue to receive critically needed care while Steward continues to focus on its ongoing Chapter 11 process.”
The deals are contingent on customary closing conditions including approvals from regulators. The deals have beem approved by Bankruptcy Court.
Of note, the pending agreement for St. Elizabeth's requires that the state of Massachusetts seize the building and grounds through eminent domain.
The landlord, a subsidiary of Apollo Global Management, has so far rejected the state's $4.5 million price tag and said it is unafraid to turn to litigation should a fair offer not be reached.
Massachusetts Governor Maura Healey said in a Friday statement that her office will "continue to press ahead" with its eminent domain plan to ensure that the hospital can remain open.
Two of Steward's other hospitals in the state, Carney Hospital and Nashoba Valley Hospital, are not included in the deal-making and were shut down this weekend.
Steward is working to sell off its assets as part of its Chapter 11 bankruptcy proceedings. All eyes are on new developments among three hospitals likely to be sold to Orlando Health and others fending off potential closures in Ohio and Pennsylvania.
Late Friday also brought word that Steward had reached an agreement with Medical Properties Trust, the landlord for several of its hospitals, that they said would prevent closures and secure jobs. If approved by the court, Steward would transfer over its interests to Medical Properties Trust, which would find an interim operator and become responsible for all operational costs. The companies also agreed to the mutual release of all claims on secured lease obligations between them.
Aug. 16
Massachusetts governor announces deals for 6 Steward hospitals
Massachusetts' governor has announced that deals in principle have been reached for Steward Health Care's remaining hospitals in Massachusetts.
Should the deals be finalized, Lawrence General Hospital will operate both campuses of Holy Family in Haverhill and Methuen. Lifespan would take over operations of Morton Hospital and Saint Anne's Hospital. Boston Medical Center will take over operations of Good Samaritan Medical Center.
Boston Medical Center also intends to operate Saint Elizabeth’s down the line. The state is first taking control of the hospital through eminent domain, according to an announcement from the governor's office.
“Today, we are taking steps to save and keep operating the five remaining Steward Hospitals, protecting access to care in those communities and preserving the jobs of the hard-working women and men who work at those hospitals,” said Gov. Maura Healey in a statement. “Our team under Secretary Kate Walsh worked day in and day out to secure new, responsible, qualified operators who will protect and improve care for their communities."
To support the transition, the governor's office teamed up with the state legislature to "develop a fiscally responsible financing plan that includes cash advances, capital support and maximizing federal matches."
The steps do not impact Carney or Nashoba Valley hospitals, Healey's office said. These facilities will close after they did not receive any bids.
While a hearing Friday centered on the status of Steward Health Care's sale of its physician group, the embattled health system's legal counsel offered an update on planned sales of its hospitals in Massachusetts.
Ray Schrock, one of Steward's attorneys, told Texas bankruptcy Judge Christopher Lopez that the legal team is aiming to address some of the concerns from potential buyers over the weekend and sign asset purchase agreements on Monday. He did ask to schedule a status conference on Tuesday to provide updates should this not come to fruition.
Details on the potential buyer or buyers or the status of individual sales were not disclosed further.
"We're doing everything possible to avoid a bad outcome, to get to a good outcome over the weekend," Schrock said.
The bulk of the hearing centered on Steward's sale of its physician group, Stewardship Health, to Rural Healthcare Group, which is backed by a private equity firm. The deal was first revealed earlier this week.
UnitedHealth Group's Optum was initially slated to pick up Stewardship, but that deal fell through following pressure from lawmakers and other prominent critics.
Orlando Health has made a bid to acquire Steward's "Space Coast" properties in Florida, bidding $439 million.
Steward is working to sell off its assets as part of its Chapter 11 bankruptcy proceedings. The sale of Stewardship as well as any notable hospital sales will require approval from the bankruptcy court and regulators.