US hospital operator Steward Health Care has received court approval for a settlement with its landlord, Medical Properties Trust (MPT), as part of its ongoing bankruptcy proceedings.
U.S. Bankruptcy Judge Christopher Lopez approved the agreement, allowing Steward to proceed with the sale of its hospital operations.
This follows the recent approval of Steward’s sale of three Florida hospitals for $439 million.
The settlement resolves a dispute between Steward and MPT over the distribution of future sales proceeds.
Steward had previously sued MPT, but under the new agreement, both parties will drop their potential claims.
MPT will forgive significant lease obligations, allowing Steward to transfer hospital operations to new operators and avoid further operating costs and litigation.
According to Ray Schrock, Steward’s general counsel, transferring the hospitals to new operators will save Steward from additional operating costs and potentially costly litigation.
Schrock confirmed that the company would complete the settlement with the stakeholders.
Lopez is expected to sign a final deal agreement later this month.
The deal involves 23 hospitals that will remain operational after the sale, with MPT signing leases with four tenants to operate 15 hospitals in several states.
These new operators took over on September 11, and MPT expects to receive approximately $160 million in annual cash rent payments after stabilization in the fourth quarter of 2026.
To ensure a smooth transition, MPT has agreed to defer cash rent payments for the 15 properties until the end of this year.
It is expected that payments will begin early next year and that approximately half of the fully stabilized rent will be achieved by the end of next year. Full stabilization will occur in the fourth quarter of 2026.
Last month, Steward received approval from Lopez to sell its physician network, Stewardship Health, to Rural Healthcare Group for $245 million.
“Steward Health Care’s Settlement Agreement with Landlord MPT Receives Court Approval” was originally created and published by Hospital Management, a GlobalData brand.
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