SHARON, Pa. – Steward Health Care System and Pennsylvania’s outgoing attorney general reportedly have come to an agreement that includes the commonwealth dropping its approximately $10 million in claims against the health system.
The stipulated agreement, filed late Monday in U.S. Bankruptcy Court in Houston, doesn’t mention Medical Properties Trust, which owns Sharon Regional Medical Center’s real estate.
The agreement states the commonwealth had filed proof of claims asserting it was owed $4.5 million in administrative expenses, which was the amount it reportedly gave Steward to keep the Sharon hospital open late last year in the form of $1.5 million monthly payments.
It also claims administrative expenses of $5,529,980 as of Dec. 20, 2024.
Both claims were filed against Steward Sharon Regional Health System Inc., Steward Pennsylvania Holdings LLC and Steward Health Care System LLC.
The stipulated agreement said the Pennsylvania attorney general’s office has agreed to “withdraw with prejudice” – which means it cannot be refiled – the request for the payment of administrative expense claims, citing Steward does not have sufficient funds to pay the claims.
Additionally, it states it will support the presentation by the mediator to the Pennsylvania Department of Health regarding placing its administrative expense claims behind other claims. The department had filed an administrative expense claim against Steward of $2.9 million on Dec. 19.
Attorney General Michele Henry is leaving office Tuesday, and Dave Sunday will be sworn in. An email to a spokesman in Henry’s office went unanswered Tuesday morning.
When contacted for comment, Robert Lackey, an attorney for the Christian H. Buhl Legacy Trust, stated only that the trust’s board of directors is continuing to stand by its decision to not drop its claims against MPT. After a recent meeting, the board vowed it “will not surrender the community’s claim against MPT.”
MPT had demanded that Buhl waive its claims regarding the ownership of the hospital and lack of upkeep of the facilities so a new owner, Tenor Health Partners, could reopen it. When Buhl refused to comply, MPT issued a statement saying it would not reopen the hospital.
Tenor CEO Radha Savitala didn’t return a call from The Business Journal, but in an interview with WKBN, she said Tenor is continuing to work to reopen the hospital, and it could be opened within days if Buhl would work with them and drop its lawsuit.
She claims MPT is working with them, providing $10 million toward the opening, and questioned why Buhl is not standing with them to save the hospital.
The Sharon hospital officially closed Jan. 6. Savitala said a team connected with Tenor has been in the building working to reopen it. On Tuesday, there were a handful of vehicles in the parking lot of the closed hospital.
Buhl contends MPT owes at least $25 million, in part due to Steward and MPT attempting to get around requirements that the owner of the hospital must put money into its upkeep.
The commonwealth has put operating money toward the hospital, and Buhl has reported it put $600,000 toward necessary repairs in the past few months before the hospital closed.