The sales of six Steward Health Care hospitals here can close as planned on Monday, but it could cost Massachusetts another $5 million.
The U.S. Bankruptcy Court judge overseeing Steward’s case ruled early Monday morning that Massachusetts should “work with other parties” to make an additional $5 million available to the “first in, last out,” or FILO, lenders that pumped millions into the company as it headed towards bankruptcy but are not in line to receive a windfall from the hospital sales.
When Judge Christopher Lopez approved Steward’s plan to sell St. Anne’s Hospital in Fall River and Morton Hospital in Taunton to Lifespan for $175 million; the Holy Family Hospital facilities in Methuen and Haverhill to Lawrence General Hospital for $28 million; and Good Samaritan Medical Center and St. Elizabeth’s Medical Center to Boston Medical Center for as much as $140 million earlier this month, he held $17 million in proceeds aside and urged the parties involved to reach an agreement on how that money should be divvied up among the FILO lenders and the owners of the hospital real estate.
But the sides weren’t able to come to an agreement and Lopez held a rare Sunday afternoon hearing that featured stretches in recess during which the sides worked towards a solution. Ultimately, the judge gave his blessing to -- and put his signature on an order effectuating -- an arrangement that saw tweaks made to hospital sale agreements and a pledge that the “Commonwealth of Massachusetts will work with other parties on the proposed $5,000,000 of additional adequate protection for the FILO Secured Parties consistent with its representations on the record at the Sale Order Hearing.”
Asked about the state’s latest financial outlay to address the Steward situation, a spokesperson for the Executive Office of Health and Human Services said there was no agreement for the state to commit the additional $5 million but otherwise did not address a series of questions about the development.
“Bankruptcy is always a long and complicated process. The Healey-Driscoll administration remains confident that these sales will be finalized soon and the five Steward hospitals will transition to new operators,” Health and Human Services Secretary Kate Walsh said in a statement.
Massachusetts already paid $72 million to keep Steward’s hospitals open through August and now September, and earlier this month confirmed that it has committed to provide at least $417 million to help keep the Steward-sold hospitals open as they transition to their new owners.
The additional $5 million would bump the state’s total financial aid commitment to $494 million so far -- more than the cumulative purchase price for Steward’s Massachusetts hospitals ($343 million).
This is a developing story. Check back for updates as more information becomes available.
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