Warren, Markey push private equity firm Apollo to ‘act quickly’ in sales of Steward hospitals

Senators Elizabeth Warren and Ed Markey are fixing on a new target in the Steward Health bankruptcy crisis, pushing affiliated private equity giant Apollo Global Management as the key “fulcrum economic stakeholder” in desperate efforts to sell the remaining Massachusetts hospitals.

“Apollo’s role in the ongoing Steward bankruptcy has thus far received little scrutiny,” the senators wrote in a letter Apollo CEO Marc Rowan. “But over the last week, your company has moved squarely into the spotlight as the ‘single negotiator’ for the future of the leases.”

As Steward has engaged in bankruptcy proceedings, years of financial mismanagement and the roles of Steward CEO Ralph de la Torre, executives from private equity firm Cerberus Capital Management, and landlords from Medical Properties Trust (MPT) and Macquarie Investment Partners (MIP) have come under scrutiny.

Steward is now scrambling to find buyers and complete sales for six Massachusetts hospitals. The company announced in late July they will close Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer by Aug. 31.

Apollo is the key financial backer behind the real estate firms MPT and MIP that bought the hospitals’ property and now “effectively owns” the properties for six remaining Steward-owned hospitals in Massachusetts, the senators cite from Steward filings. This means the private equity firm will control lease negotiations with prospective buyers.

The senators noted that the sales of the hospitals remain uncertain largely due to the financial burden of the costly leases and asked the Apollo executive to “work in good faith” to facilitate the sale of the remaining hospitals to operators that will keep them running.

“Specifically, we ask that you act quickly to negotiate with prospective buyers and provide relief from onerous leases to enable these hospitals to remain open and serving health care needs of their communities,” the letter states.

The senators also requested information on Apollo’s role in Steward’s bankruptcy and financial obligations to the company by Aug. 11.

“Apollo has had a shadowy role in Steward’s leases for years,” Warren said in a release. “Now it is time for Apollo to step into the light, and act quickly to negotiate with prospective buyers so that the hospitals can remain open and serve the people of Massachusetts.”

On Thursday, Gov. Maura Healey told reporters the sales of the remaining hospitals are “moving quickly I think right now in the bankruptcy court” and she is “cautiously optimistic.”

De la Torre came under fire in recent days following reports he attended the Olympics in Paris as the closures of the two Massachusetts hospitals were announced.

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In a statement, a spokesperson for the CEO noted he “does not have the authority to make decisions regarding sales or closures in the bankruptcy process” and was “regrettably” on a planned family vacation at the time.

A hearing for the sales of Good Samaritan Medical Center in Brockton, Morton Hospital in Taunton, St. Anne’s Hospital in Fall River, St. Elizabeth’s Hospital in Brighton, and Holy Family Hospital with campuses in Methuen and Haverhill is expected to be held in bankruptcy court Tuesday.

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