Steward closing in on deals to sell 5 Mass. hospitals

An attorney for Steward Health Care said Tuesday the company has made "significant progress" on deals to sell five Massachusetts hospitals, which would allow them to remain open under new operators.

The hospitals are St. Elizabeth’s Medical Center in Brighton, Good Samaritan Medical Center in Brockton, St. Anne’s Hospital in Fall River, Morton Hospital in Taunton and Holy Family Hospital in Methuen and Haverhill.

Steward did not name the potential buyers. But its attorney, David Cohen, said at a federal bankruptcy court hearing in Texas that they are all "local" and "high-quality." He said the company is also close to a deal to sell its physicians network, Stewardship Health.

“A lot of work remains to be done,” Cohen said, “but we do believe we're making some great progress.”

Two Steward hospitals, Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer, are slated to close within weeks after Steward, a national, for-profit hospital chain, said it received no "qualified" bids to acquire them. One company submitted an offer for all of the Steward hospitals, but it was rejected as not viable.

Steward's efforts to restructure and sell its hospitals have been complicated by lease-back deals the company entered with a real estate investment firm, Medical Properties Trust (MPT). Because Steward doesn't own the buildings or land where its hospitals sit, potential buyers must reach deals with MPT and its co-owner, Macquarie Asset Management, to lease or purchase the Massachusetts properties.

Steward's attorney said Tuesday that MPT and Macquarie are hammering out an agreement to turn the properties over to their mortgage holder, Apollo Global Management, to facilitate sales to new owners.

Bankruptcy court Judge Christopher Lopez approved Steward's request to accept a $30 million lifeline from Massachusetts to keep its hospitals operating until the end of August. The funding will come through advance Medicaid payments. Steward’s lawyers said the money is critical for helping transition the hospitals to new owners.

Massachusetts officials have agreed to give Steward $11 million by the end of this week. An additional $19 million at the end of the following week is contingent on deals to sell the hospitals and properties.

“There are real deadlines here. Plenty of work to get done,” Lopez said. “But today is an important day to allow hospitals to get funding, much needed funding, and to have the certainty of receiving that funding.”

State officials have told WBUR they are developing an aid package that includes $80 million in state and federal matching funds over three years to help new operators take over Steward's hospitals.

Steward operates more than 30 hospitals across eight states. The company, once hailed as a savior of medical centers in underserved communities, amassed billions of dollars in debt and filed for Chapter 11 bankruptcy protection in May.

Steward is losing tens of millions of dollars a month, according to court documents.

“I really hope we can get a deal done that will save five hospitals in the state that are threatened right now,” Gov. Maura Healey told reporters Tuesday.

“Hopefully, it sorts out… as soon as possible, so we have an orderly transfer of ownership from the scoundrels who are Steward, to responsible operators here in Massachusetts.”

Walter Wuthmann contributed to this report.