Steward Gets No ‘Qualified’ Bids for 3 Local Hospitals

YOUNGSTOWN, Ohio – No “qualified” bids have been received for the three local hospitals owned by bankrupt Steward Health Care Services: Sharon Regional Medical Center in Sharon, Pa., Hillside Rehabilitation Hospital in Howland and Trumbull Regional Medical Center in Warren.

Steward revealed the lack of bids it deems qualified in a bankruptcy court filing Saturday that reported Steward has accepted bids for its hospitals in Hope, Ark., and West Monroe, La. Bid terms for these hospitals were not disclosed in the document; final sales hearings are scheduled for July 31.

The hospitals in Arkansas and Louisiana were clustered with the three local hospitals and designated by Steward as the “first round” of its 31 hospitals to be sold.

With no bids for Sharon Regional, Hillside Rehabilitation and Trumbull Regional determined qualified by Steward, the bankrupt company said it is “currently working with the consultation parties to evaluate alternatives. … No decision has been made … and [Steward] will make a further announcement with respect to such hospitals at a later date.”

Steward provided no additional information.

Last week the attorney general of Pennsylvania and the Christian H. Buhl Legacy Trust filed a joint objection to bankruptcy court procedures that authorized the sale of Sharon Regional Medical Center. They argue that any sale should not include leases on the 54 properties Steward acquired in 2017 when it paid Community Health Systems $70 million to buy the hospital.

Sharon Regional, which is more than 125 years old, was operated by the Buhl Trust from 1893 to 2014. 

In March 2014, the trust and its subsidiary, Sharon Regional Physicians Services, sold all operating assets and the 54 parcels to Community Health Systems.

CHS then sold the hospital and its real estate to Steward Health Care System LLC in February 2017.

Steward subsequently signed a sale leaseback deal with Medical Properties Trust, an international real estate investment trust based in Alabama.

The deal with MPT for Sharon Regional’s 54 properties imposed “burdensome financial terms … and undermined the financial viability of Sharon hospital,” the attorney general and Buhl Trust state in their objection.

Moreover, Steward failed to disclose that ownership of the hospital’s real estate was being diverted to MPT, in violation of a 2017 ruling by Mercer County Common Pleas Court that cleared the way for Steward to buy the hospital.

Steward has fallen $20.1 million short of its commitment to invest $75 million in capital improvements at Sharon Regional. And the company owes the commonwealth more than $501,000 in “Medicare credits/offsets,” court papers say.

The attorney general and Buhl Trust say they would welcome a sale to an entity that is “financially and operationally capable of operating the hospital,” but not if the purchaser assumes the “MTP lease or otherwise saddles itself, and Sharon hospital, with financially burdensome obligations.”

Steward operates 31 hospitals in eight states. The company paid MPT nearly $240 million in the 12 months before it filed Chapter 11, according to reports.

It’s not known if their objection adversely affected Steward’s determination of what it considers a “qualified bid” for the hospital.

Nor is it known if the company’s three local hospitals were being marketed as a unit.

Copyright 2024 The Business Journal, Youngstown, Ohio.