Latest news with #MedicalPropertiesTrust
CBS News
20 hours ago
- Business
- CBS News
Steward Health Care claims former executives' "greed and bad faith misconduct" led to hospitals chain's bankruptcy
Steward Health Care, an embattled hospital chain that has been the focus of federal scrutiny, has filed new court papers blaming the company's financial woes on its founding chief executive. The company alleges that the ex-CEO and three former colleagues misappropriated hundreds of millions of dollars and drove the chain into bankruptcy. Steward accuses its founder Ralph de la Torre and three others — Michael Callum, James Karam, and Sanjay Shetty — of defrauding the company of more than $245 million. "Through their greed and bad faith misconduct, [these former insiders] operated Steward with the aim of enriching themselves at the expense of the Company, its creditors, and the patients and communities that Steward served," the new filing alleges. "These insiders pilfered Steward's assets for their own material gain, while leaving the Company and its hospitals perpetually undercapitalized and insolvent." Once the nation's largest for-profit hospital chain, Steward operated hospitals in Massachusetts, Texas, Florida, Pennsylvania and other states. CBS News found that de la Torre pushed for the company's expansion. By working with a real estate investment firm, Medical Properties Trust, de la Torre helped purchase new medical properties, sell off the real estate, and force the hospitals into costly lease-back arrangements. A CBS News investigation that spanned nearly two years documented allegations of how private equity investors and de la Torre followed this formula, extracting hundreds of millions of dollars in dividends from the real estate sales, while health care workers and patients struggled to get the life-saving supplies they needed as a result. Records reviewed by CBS News showed Steward hospitals around the country left a trail of unpaid bills, at times risking a shortage of potentially life-saving supplies. That included a case in a Massachusetts hospital where medical staff says a device that could have stopped the bleeding in a new mother's liver was repossessed by the manufacturer weeks earlier. After being transferred to another hospital, the young woman died just hours after giving birth to her first daughter. Last August, after filing for bankruptcy, the company sold off six Massachusetts hospitals. The sale of the final two facilities in the state left about 1,200 workers jobless, according to state officials. In a 2024 interview with CBS News, Massachusetts Gov. Maura Healey did not hold back in her assessment of the conduct of Steward executives. "I'm disgusted. It's selfish. It's greed," she said. At the time of the patient's death, a spokesperson for Steward told CBS News company executives always put patients first and said they "deny that any other considerations were placed ahead of that guiding principle." In an earlier statement, the spokesperson said Steward "has actively and meaningfully invested" in its hospital system since its formation, including in Massachusetts, where it took over hospitals that were "failing" and "about to close." De la Torre also defended the company's actions. "Steward Health Care has done everything in its power to operate successfully in a highly challenging health care environment," de la Torre said in a company statement in 2024. This week's complaint lists three major transactions that de la Torre and executives allegedly profited from while leaving Steward hospitals struggling for funds to operate. In January 2021, de la Torre allegedly took a $111 million dividend payout while the company was struggling financially. The former CEO also pocketed $81.5 million according to the complaint. The court filing also lists the former executives who benefited: Callum, who as vice president for physician services at Steward received $10.3 million. Shetty, then-president of Steward Health Care System received $1.8 million and Karam, who remains a member of Steward's board, received $728,456. The complaint also claims Steward Health Care International, the international arm of Steward that's majority-owned by de la Torre, received $4.3 million of the dividend payout. Later that year, Steward claims de la Torre overpaid by $200 million for five Miami-based hospitals acquired from Tenet Healthcare Corporation. The complaint alleges the former CEO pushed for the $1.1 billion deal based on his "personal desire to build a hospital empire in the Miami area, rather than on any independent financial analysis." According to the complaint, de la Torre then sold assets related to Steward's Medicare Advantage business to a company called CareMax in 2022. Steward, through its physicians organization, allegedly received $60.5 million in cash, while the bulk of the proceeds — almost $134 million in stock of CareMax — ultimately went to a holding company that was majority-owned by de la Torre, Callum, Shetty and Karam. The complaint alleges de la Torre and named board members "sold valuable" assets and "diverted the proceeds to themselves" while the company went insolvent. "De la Torre, Callum, and Karam were grossly negligent and breached their duties of care, loyalty, and good faith," according to the filing. CareMax filed for bankruptcy in February. While Steward's hospitals were struggling, CBS News previously reported on de la Torre's lavish personal spending, including the purchase of a $30 million yacht in 2021, a multimillion-dollar Texas horse ranch in 2022, and two corporate jets valued at $95 million. Steward Health Care is now being run by a court-appointed administrator and is trying to claw back funds from its former leaders to pay off its creditors. De la Torre, who founded the company in 2010, is at the center of a federal probe focused on potential fraud, embezzlement and violations of the Foreign Corrupt Practices Act, sources told CBS News. In 2024, he refused to appear before the Senate Health, Education, Labor and Pensions Committee that had been looking into Steward's bankruptcy, despite being issued a subpoena. Senators took the rare step of holding him in contempt for that failure to appear. In a statement, a spokesperson for de la Torre says the former CEO "disputes the allegations of wrongdoing and will vigorously defend himself against them."
Reuters
3 days ago
- Business
- Reuters
Steward Health gets green light to repay creditors with litigation proceeds
July 16 (Reuters) - Bankrupt hospital network Steward Health Care received court approval on Wednesday to proceed with a liquidation plan that aims to repay its creditors with the proceeds of lawsuits against its former owners and insiders. U.S. Bankruptcy Judge Christopher Lopez overruled objections to Steward's bankruptcy plan at a court hearing in Houston, Texas, despite uncertainty about Steward's ability to repay all expenses it racked up during its bankruptcy. Those expenses must be paid in full before a Chapter 11 plan can take effect, and Steward expects to be able to fully repay those costs by mid-2027. Several objectors had argued the uncertainty of Steward's success in litigation and the long delay between bankruptcy court approval and the payment of necessary Chapter 11 expenses were fatal flaws in the company's repayment plan. Steward, once the largest privately owned health network in the U.S., filed for Chapter 11 with $9 billion in debt, after its former private equity owner sold the land under its hospitals while embarking on an aggressive expansion strategy across 10 U.S. states. Members of Congress and state health officials have criticized the company for richly paying its executives while cutting medical services for patients. The company owed huge debts to both its primary landlord, Medical Properties Trust, and to lenders that had extended credit for Steward's hospital operations, and the dueling debts complicated its efforts to sell the hospitals. Objectors, including the state of Massachusetts, a group of doctors who are losing deferred compensation benefits promised by Steward, and the U.S. Department of Justice's bankruptcy watchdog, had argued that Steward was prioritizing payment of its bankruptcy lawyers over other mandatory expenses. Some objectors suggested that some legal fees could be clawed back to pay other creditors, such as vendors who continued to provide medical services to Steward after it filed for Chapter 11. Lopez rejected the idea that Steward's bankruptcy professionals were "picking themselves over everyone else," saying that Steward's lawyers had prevented the complete collapse of a 31-hospital network that served 2 million patients annually, many of them in rural areas with few other healthcare options. While Steward was not able to save all of its hospitals, most of them were transferred to new operators during the bankruptcy, work that was "extremely challenging," Lopez said. Steward's primary bankruptcy law firm, Weil, Gotshal & Manges, billed more than $100 million from May 2024 to April 2025, and Steward is also responsible for other costs, including $32 million billed by the lawyers and financial advisers of a court-appointed committee that represents the interests of Steward's junior creditors. Steward will pursue more than $3 billion in legal claims against a broad range of former insiders, insurers and creditors that received payments from the company while it was collapsing into bankruptcy. Steward estimates that it can fully repay its Chapter 11 expenses if it recovers just 13% of its asserted claims, and Lopez said Wednesday that its strategy seemed feasible. "You don't need a home run," Lopez said. "You just need a couple of singles, but I don't know if you're going to get them." Lopez acknowledged that Steward's litigation strategy may still fail, and he said he would have "no qualms" about converting the case to a more straightforward Chapter 7 liquidation if the litigation is proceeding too slowly or if Steward's expenses are higher than estimated. Steward's largest legal claims are against its former CEO Ralph de la Torre, its former private equity owner Cerberus Capital Management and other insiders that allegedly set the stage for Steward's downfall by loading it up with debt and taking payments for themselves. Steward sued de la Torre in Houston bankruptcy court on Tuesday, saying that he and other former insiders "pilfered Steward's assets for their own material gain, while leaving the Company and its hospitals perpetually undercapitalized and insolvent." De la Torre, through a spokesperson, disputed the allegations of wrongdoing in the lawsuit and said he will vigorously defend himself. Cerberus did not immediately respond to a request for comment, but it has previously said that Steward was in good financial shape when it sold its ownership stake in 2020. During its bankruptcy, Steward closed some hospitals in Massachusetts and Ohio. It sold some hospitals to outside buyers, and handed others over to Medical Properties Trust which continued as landlord while putting new hospital operators in place. The case is In re: Steward Health Care System LLC, U.S. Bankruptcy Court for the Southern District of Texas, No. 24-90213. For Steward: David Cohen, Clifford Carlson, Gabriel Morgan, Stephanie Morrison, Jeffrey Saferstein of Weil, Gotshal & Manges; Ray Schrock of Latham & Watkins For Massachusetts: Andrew Troop of Pillsbury Winthrop Shaw Pittman For the Office of the U.S. Trustee: Ha Nguyen of the Office of the U.S. Trustee Read more: Bankrupt Steward Health puts its hospitals up for sale, discloses $9 bln in debt Steward Health gets approval for landlord settlement, Florida hospital sales US Senate probes Steward Health bankruptcy, subpoenas CEO
Yahoo
24-06-2025
- Business
- Yahoo
Prediction: This 7% Yielding Stock Could Increase Its Dividend in 2026
Medical Properties Trust's dividend cut was a necessary evil considering the headwinds it faced. Since then, the company has made significant moves to improve its business. MPT's revenue could start growing again next year, along with its dividend. 10 stocks we like better than Medical Properties Trust › Dividend investors loathe payout cuts, but sometimes they are necessary for a corporation facing significant headwinds to get back on track. Take Medical Properties Trust (NYSE: MPW), a healthcare-focused real estate investment trust (REIT). The company has struggled over the past two years due to tenant-related issues. It had to cut its dividends twice as a result. However, MPT has made significant strides in the right direction, and the company may soon resume raising its dividends. Here's the rundown. The REIT business seems somewhat stable. These companies operate real estate properties that they rent out to businesses, collecting regular and consistent rental income. Easy enough. REITs in the healthcare sector can appear even more reliable, as medical care remains in high demand regardless of economic conditions. However, even health-focused businesses can encounter issues and go bankrupt. That's what happened to two of MPT's former tenants, including one that was, at some point, its largest. The company's financial results took a significant hit. It hasn't recovered yet. MPT's revenue is still moving in the wrong direction. But the comeback has already begun. MPT found multiple new tenants to occupy most of the facilities formerly rented out by its then-largest client that went bankrupt. Among other things, that means the company's portfolio is now more diversified. One or two tenants going out of business is unlikely to affect MPT as much as it did last time. The new contracts it signed with its new renters have an average lease of 18 years. Regular rental income for almost two decades provides MPT with some security, provided, of course, these new tenants don't go out of business, too. While that could certainly happen, these moves make the company far more stable than it was when its troubles first started. MPT's quarterly dividend per share went from $0.29 to $0.15 to $0.08 in less than two years. Not only was it dealing with rapidly declining revenue, but it also had pressing financial obligations that needed to be addressed. MPT has worked to solve both problems. The company's new tenants aren't paying the full rental amount due -- at least not yet. They began doing so only in the first quarter, and they are currently paying only a fraction of it. They will gradually increase rent payments to 100% of the due amount by the fourth quarter of 2026. By the time MPT starts collecting the full amount, its revenue should move in the right direction since it expects about $160 million in rental revenue from these facilities. In the first quarter, the company's revenue declined by 17.5% year over year to $223.8 million; $160 million represents more than half of its first-quarter revenue. Even assuming the $223.8 million included 50% of the full rental income it will receive from these new tenants by the fourth quarter of 2026 (it doesn't, the payments will reach 50% by the end of this year), it would still mean that MPT would be adding $80 million in revenue by the end of next year. Adding that to its first-quarter revenue would have led to year-over-year top-line growth of 12% compared to the first quarter of 2024. Decent revenue growth awaits MPT, and that will allow it to improve its bottom-line numbers as well. Further, the company has improved its balance sheet. MPT sold some facilities to raise money and pay down debt, amounting to $2.2 billion between early 2023 and the end of 2024. It's harder for a company to raise dividends when it has to worry about upcoming obligations. However, the recent moves MPT made, which also included refinancing existing debt, have granted it far more financial flexibility. The stage is set for MPT to start growing its dividend again. Don't expect a massive hike, but with a stable payout program that could start growing again next year and a 7.3% forward yield, the company is far more attractive as an income stock than it was just two years ago. Yet, the stock is still down by 51% over this period. In my view, it's still time to buy the stock. MPT's shares should move in the right direction as its comeback continues. Before you buy stock in Medical Properties Trust, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Medical Properties Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $676,023!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $883,692!* Now, it's worth noting Stock Advisor's total average return is 793% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Prediction: This 7% Yielding Stock Could Increase Its Dividend in 2026 was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21-06-2025
- Business
- Yahoo
Should You Forget Medical Properties Trust and Buy These Unstoppable Dividend Stocks Instead?
Medical Properties Trust has a 7.2% yield and a history of dividend cuts behind it. Other healthcare REITs have high yields and dividends that have withstood adversity much better. Omega Healthcare has a 7.4% yield, and LTC Properties has a 6.5% yield. 10 stocks we like better than Medical Properties Trust › Medical Properties Trust (NYSE: MPW) has a lofty 7.2% yield. That compares to the S&P 500 index's skinny little 1.2% yield, and the average real estate investment trust's (REIT's) yield of around 4.1%. On the surface, it appears to be an obvious choice. But don't jump at the chance to buy Medical Properties Trust just yet. You can get similarly large yields from healthcare REIT peers Omega Healthcare (NYSE: OHI) and LTC Properties (NYSE: LTC), and both offer a more compelling dividend story than Medical Properties. Here's what you need to know. Take a look at the chart below for Medical Properties Trust. The orange line is the quarterly dividend, and the purple line is the stock price. Notice the massive drop in both that has occurred since 2022. That was when some of the REIT's large tenants started to experience financial troubles. It was the start of a tense and complicated period when a small number of Medical Properties Trust's tenants failed, and it had no choice but to cut its dividend. For long-term dividend investors, the lofty 7.2% yield on offer from Medical Properties Trust comes with some lofty risks. It's possible that the bad news is all out, and the REIT can start to turn its business around. However, that's far from a certainty. Unless you're willing to bet that the future will look much brighter from here, most dividend investors will probably want to tread with caution. In fact, even if a turnaround is underway, it's likely to be a years-long process. There's a contrast to be made here with healthcare REITs Omega Healthcare and LTC Properties. Both of these REITs focus on senior housing, including nursing homes and assisted living facilities. During the coronavirus pandemic's height, both of these property types were hard hit. The reason was pretty simple: COVID-19 is particularly deadly for unvaccinated older adults and spreads easily in group settings. Occupancy fell for both REITs, and there was a drought of new customers. Both Omega and LTC also had to deal with tenant problems, as some of their lessees had trouble paying rent. That would seem like a perfect storm that would lead to a dividend cut. Yet neither Omega nor LTC cut their dividends. To be fair, neither of these REITs has increased their dividends in years. But a static dividend is much better than a dividend cut. Right now, Omega's yield is 7.4%, while more diversified LTC Properties has a 6.5% yield. The future is starting to look brighter for each of these healthcare REITs. Omega's adjusted funds from operations (FFO) rose year over year in the first quarter of 2025, and it increased its full-year guidance. LTC Properties, meanwhile, expects 2025's adjusted FFO per share to be flat to slightly higher. However, it's diversifying its business approach to include senior housing operating properties (SHOP). (SHOP assets are owned and operated by the REIT, though it actually hires a third party to handle day-to-day management of the asset.) As it grows, this business should increasingly benefit from the growth in demand for senior housing as the U.S. population ages. The key takeaway here, however, is that, when faced with adversity, Omega and LTC Properties held firm in their commitment to shareholders. They adjusted as needed to keep paying. Medical Properties Trust, on the other hand, couldn't manage that feat. The past doesn't predict the future, of course, but the past is all we have to go on as investors. And since all three of these healthcare REITs have faced material adversity just recently, their strengths and weaknesses have been laid bare. While the worst might be over for Medical Properties Trust, most dividend investors should probably err on the side of caution with either Omega, which has a higher yield, or LTC Properties, which has a lower yield but a far more diversified business model. Before you buy stock in Medical Properties Trust, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Medical Properties Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor's total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Should You Forget Medical Properties Trust and Buy These Unstoppable Dividend Stocks Instead? was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
19-06-2025
- Business
- Yahoo
Medical Properties & Praemia REIM JV Announces Refinancing Transaction
Medical Properties Trust, Inc. MPW — also known as MPT — and Praemia REIM announced that its 50/50 joint venture ('JV') has refinanced its maturing seven-year debt agreement at a 5.1% fixed rate. This €702.5 million debt, which is non-recourse and spans a duration of 10 years without amortization, is secured by a portfolio of German rehabilitation hospitals run/operated by MEDIAN, recognized as the largest operator of rehabilitation hospitals across Europe. The primary purpose of the newly secured loan is to fund the repayment of the €655 million secured loan that was arranged during the JV formation in 2018. The increased size of the new financing amount indicates a rise in the underwritten value of the facilities over the previous seven years, rather than a rise in the loan-to-value ratio. Importantly, since its formation, the annual cash rent generated by the JV has grown by approximately €20 million, which is roughly equivalent to the expected rise in market interest expense from the new loan. Per Edward K. Aldag, Jr., chairman, president and CEO of MPT, 'Given the tremendous market demand for MPT's hospital real estate from sophisticated institutional investors, we continue to benefit from access to low-cost capital. This transaction, along with others recently executed, reinforces the value of $15 billion in hospital real estate around the world, the importance of our CPI-linked rent escalators as a natural hedge against inflation, and our confidence in the balance sheet flexibility available to us moving forward.' This refinancing offers Medical Properties enhanced financial flexibility. The extended maturities of the assumed debt will help the company improve its maturity profile and enjoy greater liquidity for day-to-day operations. MPW has been making efforts to enhance its liquidity position and alleviate bottom-line pressure. Further, it focuses on strengthening its balance sheet position. As of May 7, 2025, the company had approximately $1.3 billion of liquidity, including cash on hand and availability under its $1.28 billion revolving credit facility. Its access to diverse capital sources through capital recycling and internal cash flow provides ample financial flexibility and is likely to support its growth endeavors. In the past six months, shares of this Zacks Rank #2 (Buy) company have gained 19.7% compared with the industry's upside of 7.2%. Image Source: Zacks Investment Research Some other top-ranked stocks from the broader REIT sector are VICI Properties VICI and W.P. Carey WPC, each carrying a Zacks Rank #2 at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. The Zacks Consensus Estimate for VICI's 2025 FFO per share has moved one cent northward to $2.34 over the past two months. The consensus estimate for WPC's 2025 FFO per share has increased 1% to $4.88 over the past two months. Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report W.P. Carey Inc. (WPC) : Free Stock Analysis Report Medical Properties Trust, Inc. (MPW) : Free Stock Analysis Report VICI Properties Inc. (VICI) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
