The transactions could face some further hurdles, however. Under their terms, the hospitals must change hands by Sept. 30 or the buyers can terminate the sales. But the deals are still subject to state and federal regulatory reviews in processes that typically take months.
Get Trendlines
A business newsletter from Globe Columnist Larry Edelman covering the trends shaping business and the economy in Boston and beyond.
Governor Maura Healey’s administration — which helped midwife the hospital sales — will be pushing for rapid approvals by regulators. The high stakes were underscored on Saturday, when Steward closed two other hospitals, Carney in Dorchester and Nashoba Valley Medical Center in Ayer, that it said hadn’t received qualified bids.
Meanwhile, the judge said he would withhold about $17 million from the sales proceeds of the six surviving hospitals to determine at a later date how much, if any, should go to a group of Steward’s secured lenders that strenuously objected to how they were allocated. The purchase deals assigned the bulk of the hospitals’ value to their real estate.
Judge Lopez, at a hearing in US Bankruptcy Court in Houston where Steward filed for bankruptcy May 6, also green-lighted another $42 million in funding from the state of Massachusetts to keep the hospitals solvent until new owners can take over operations. The money must be released by Friday for the hospitals to meet their payrolls.
That outlay will raise the state’s total bridge funding commitment to $72 million. The hospitals’ dire financial condition was underscored in a Labor Day court filing in which Steward said it had effectively run out of bankruptcy financing from private lenders. “Without the Sept. funding [from Massachusetts],” the filing said, “the debtors have insufficient liquidity to continue funding the losses of these hospitals.”
Lopez adjourned Wednesday’s hearing for more than an hour to study overnight filings that addressed last-minute snags before returning to the bench to issue his ruling. Other issues remain to be worked out. The hospitals buyers, for instance, are in discussions with the Roman Catholic Archdiocese of Boston — which sold the hospitals to Steward in 2010 — about whether they’ll retain their names and religious artifacts.
“This is the best deal that’s on the table, and that’s saying a lot,” the judge said, citing the Healey administration’s role. “There’s been an extensive process. The Commonwealth has already put in an incredible amount of money to even get us to this point and not subjecting [the hospitals] to risks while there are real people sitting in beds right now.”
The state’s financial support is only beginning. While terms of the sales deals were disclosed last week, the administration negotiated separate agreements to back each of the buyers with additional money — some of it collected from the federal government or other hospitals — to support the transition over the next three years. Those packages haven’t been made public, but are expected to total as much as $700 million.
In the deals approved Wednesday, the lion’s share of the proceeds will be allocated to Apollo Global Mangement, an investment firm that holds the mortgages on Massachusetts hospital land and buildings owned jointly by Medical Properties Trust and Macquarie Infrastructure Partners. The landlords are turning the properties over to Apollo because the mortgages they owe exceeds the value of the sales proceeds.
Boston Medical Center, the state’s largest safety-net hospital, is paying $140 million for St. Elizabeth’s in Brighton and Good Samaritan in Brockton. All but $9.5 million of the sale will be going to Apollo.
Similarly, all but $8.2 million of the $175 million that Providence-based Lifespan is paying for St. Anne’s in Fall River and Morton in Taunton is being allocated to the real estate. And, Lawrence General’s entire $28 million purchase price for Holy Family, which has campuses in Haverhill and Methuen, is begin assigned to mortgage holder Apollo.
Objecting to the allocations of the proceeds, Michael Price, a lawyer representing a consortium of private credit firms that gave Steward about $575 million in secured loans during the bankruptcy process, said the allocation of the proceeds created “a zero-dollar economic situation” for his clients, “eviscerating the rights of the secured creditors” in the bankruptcy.
“No one can be surprised that we’re standing here in opposition,” Price said, noting that Steward still owes about $40 million in paid time off to hospital workers who aren’t secured creditors. “We’d like for employees to be paid but… we can’t subordinate our claims to junior claims.”
But noting that the hospitals are operating at a loss, Candace Arthur, a lawyer for Steward, said the lenders aren’t required to consent to the sales deals if the debtor has conducted a robust sales process and there is a compelling business reason for the transactions.
“These sales for the Massachusetts hospitals are the debtor’s only option available after a thorough search” for buyers, Arthur said. “And the transaction terms reflect hard-fought negotiations, compromises, and settlements… The marketing process has spoken.”
This story has been updated to correct the total value of the hospital sales.
Robert Weisman can be reached at robert.weisman@globe.com.
Source link : http://www.bing.com/news/apiclick.aspx?ref=FexRss&aid=&tid=66d90e0238694033b4e7ccdae7ef9ffe&url=https%3A%2F%2Fwww.bostonglobe.com%2F2024%2F09%2F04%2Fbusiness%2Fsteward-hospitals-in-massachusetts%2F&c=15707885727341249461&mkt=en-us
Author :
Publish date : 2024-09-04 08:12:00
Copyright for syndicated content belongs to the linked Source.