U.S. hospital operator Steward Health Care has received court approval for a settlement with its owner, Medical Properties Trust (MPT), amid ongoing bankruptcy proceedings.
U.S. Bankruptcy Judge Christopher Lopez approved the agreement, which allows Steward to move forward with the sale of the hospital operations.
This comes on the heels of Steward’s recent approval of the sale of three Florida hospitals for $439 million.
The settlement resolves a contentious dispute between Steward and MPT over the division of future sale proceeds.
Steward had previously filed a lawsuit against MPT, but under the new agreement, both parties will waive potential claims.
MPT will waive significant lease obligations, allowing Steward to transfer hospital operations to new operators and avoid further operating expenses and litigation.
Steward’s attorney, Ray Schrock, said transferring the hospitals to new operators would prevent Steward from facing additional operating costs and avoid the risk of potentially costly legal disputes.
Schrock confirmed that the company will continue to complete the settlement with stakeholders.
Lopez is expected to make a decision on whether to grant final approval to the deal later this month.
The deal includes 23 hospitals that will remain in operation after the sale, with MPT arranging leases with four tenants to operate 15 hospitals across several states.
These new operators took over on September 11, with MPT expecting to receive approximately $160 million in annual cash lease payments upon stabilization by the fourth quarter of 2026.
To facilitate a smooth transition, MBT has agreed to defer cash rent payments for the 15 properties until the end of this year.
Payments are expected to begin early next year, reaching about half of the fully stabilized rent by the end of next year, and full stabilization by the fourth quarter of 2026.
Last month, Steward received approval from Lopez to sell her network of doctorsStewardship Health, to rural healthcare group for $245 million.
“Settlement Agreement Between Steward Health Care and MPT Landlord Receives Court Approval” was originally created and published by Hospital Managementa trademark owned by GlobalData.
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