(Bloomberg) -- Bankrupt hospital operator Steward Health Care System accused its landlord Medical Properties Trust Inc. of improperly interfering with a court-approved plan to sell some properties to pay off creditors.
In a lawsuit filed Monday in Houston bankruptcy court, Dallas-based Steward claims MPT spoke directly to potential bidders without the hospital operator’s consent and in a manner that violates a judge’s order setting the terms of the Chapter 11 sale process. The complaint escalates an ongoing dispute between Steward and MPT, which denied the new interference claim.
Steward said it has limited cash and that the bankruptcy judge monitoring the sale process needs to quickly resolve a dispute over how bids for the hospitals are valued. The hospital licenses and equipment are owned by Steward but the property on which they operate is controlled by MPT leases.
MPT has sought to influence potential buyers by steering most of the value of their bids to the real estate the REIT controls, the hospital operator claims. The dynamic has resulted in bids providing little to no value to Steward or its creditors, but preserves the value of MPT’s leases that are at above-market rates, according to the complaint.
Steward claims MPT engaged in “calculated efforts to undermine the debtors’ sales process by attempting to siphon all value from the debtors’ estates and hospitals into its own coffers.”
An MPT spokesperson said the REIT had been “collaborative and accommodating to help ensure Steward’s hospitals can remain open.” MPT said it worked with potential bidders to address real estate matters and said the leases represent “a small fraction of Steward’s revenues.”
Steward filed Chapter 11 in May and has been working to sell its hospitals to new owners. The company operates about 30 hospitals in Florida, Massachusetts, Texas and other states. Earlier this month, Steward won court permission to use a $30 million lifeline for six of its Massachusetts hospitals.
The bankruptcy case is Steward Health Care System LLC, 24-90213, US Bankruptcy Court for the Southern District Court of Texas.
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