


The lawyer representing Massachusetts state government in Steward Health Care’s bankruptcy case urged a judge Wednesday morning to approve the sale of six hospital sites here and hinted at “the support that will be required in the future for these hospitals” from state government.
“The commonwealth has watched and participated in this process for months and months — days and days of mediation, days and days of effort to bring together bidders and the estate in order to consummate transactions that will preserve jobs, will preserve hospitals, and first and foremost, will preserve health care in communities that require them,” Andrew Troop, the state’s lawyer from the New York office of Pillsbury Winthrop Shaw Pittman, said. “This is not to say that there weren’t tough decisions made in this case with respect to other transactions. But here, there are willing buyers for assets that are, however described, challenged.”
The bankrupt company that used to be based in Massachusetts presented Judge Christopher Lopez with its deals to sell off the remainder of its hospitals here on Wednesday morning in Houston, Texas.
Steward wants to sell St. Anne’s Hospital in Fall River and Morton Hospital in Taunton to Lifespan for $175 million; the Holy Family Hospital facilities in Methuen and Haverhill to Lawrence General Hospital for $28 million, and Good Samaritan Medical Center and St. Elizabeth’s Medical Center to Boston Medical Center for as much as $140 million. Steward closed its other two hospitals here, Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer, on Saturday.
Lopez said Wednesday that he is “really leaning towards approving the sale,” but wanted to think it over until 2 p.m.
Troop said Massachusetts “has tried to do its fair share” to get the deals to the point of seeking court approval, including advancing Steward $30 million to fund operations in August and, pending court approval Wednesday, providing the company another $42 million to keep the hospitals afloat until the sales close, possibly on Sept. 30.
“The commonwealth has also thought very hard about the delivery of health care in Massachusetts, and the support that will be required in the future for these hospitals to hopefully turn themselves around and become the pillars of the community that they once were,” he said.
The Healey administration has said the state will provide additional financial support for Steward, but has so far declined to say how much more the state will contribute. The financial aid package to help ease the transitions to new owners could reportedly swell to $700 million over three years.
Candace Arthur, one of Steward’s lawyers from the firm Weil, Gotshal & Manges, laid out for the court just how complicated of a process it was to reach the deals.
She described “challenging issues” around value allocation, alternative source financing, navigating regulatory regimes and negotiating with multiple parties at the table.
“None of the sales are just two-party binary discussions. Each sale involved the debtors, the buyer, the debtor’s secured lenders, the debtor’s landlord under the master lease governing the real property that the hospitals are situated, the mortgagee of the underlying real property, the creditors committee, and the Commonwealth of Massachusetts. And this is in connection with negotiating the transaction terms, and doesn’t include the concurrent negotiations that the debtors engaged in with unions and contract counterparties,” she said.
Arthur added, “So truly, your honor, each transaction before you today is the highest or best that the debtors are able to achieve.”