Dive Transient:
- Bankrupt Steward Well being Care is suing its former CEO Ralph de la Torre, alleging he and different former well being system leaders “pilfered” the corporate’s belongings and led to its monetary decline.
- In a lawsuit filed Tuesday in Chapter Court docket for the Southern District of Texas, the supplier argued de la Torre and a few former board members “operated Steward with the intention of enriching themselves on the expense of the Firm, its collectors, and the sufferers and communities that Steward served.”
- The well being system, which filed for chapter final 12 months, seeks to recoup almost $1.4 billion from de la Torre and the opposite defendants.
Dive Perception:
Steward’s chapter is without doubt one of the largest supplier restructurings in a long time.
The submitting despatched the Dallas-based well being system on a monthslong push to dump dozens of hospitals and different belongings, leaving some services to close their doorways after failing to search out consumers.
Hundreds of jobs had been misplaced after 5 Steward hospitals shut down, and the closures strained native healthcare programs, in accordance with a report printed this spring by the Non-public Fairness Stakeholder Venture.
The chapter additionally sparked the ire of lawmakers, who raised considerations about entry to care in communities served by Steward in addition to the well being system’s monetary practices within the run-up to its collapse.
De la Torre was known as earlier than the Senate final 12 months to testify about Steward’s chapter, however he failed to seem and was held in contempt for ignoring a congressional subpoena. De la Torre finally resigned from his place as Steward CEO and chairman of the well being system’s board final fall.
Now, he and different former Steward officers are dealing with a lawsuit from the system, alleging they mismanaged the well being system to spice up their very own funds. De la Torre couldn’t be reached for remark by Healthcare Dive by press time. In a remark to Bloomberg Regulation Wednesday, a spokesperson for de la Torre stated he “disputes the allegations of wrongdoing.”
The case facilities round three transactions executed from April 2020 by November 2022. In a single deal, de la Torre allegedly orchestrated a $111 million dividend paid out to a few of the defendants, even at a time when the well being system was “bancrupt,” in accordance with the lawsuit.
The case additionally argues a 2021 buy of 5 Miami-area hospitals and their related doctor practices from Tenet Healthcare — a for-profit well being system additionally named within the swimsuit — value Steward $1.1 billion, above the services’ worth at $895 million.
Steward alleged the excessive worth was “primarily based on de la Torre’s private want to construct a hospital empire within the Miami space, relatively than on any unbiased monetary evaluation.” Tenet didn’t reply to a request for remark by press time.
Moreover, Steward claimed a 3rd deal negotiated by de la Torre, the place the well being system offered its value-based care belongings to medical middle operator CareMax, ended up funneling the sale’s proceeds again to a separate entity managed by the defendants.
Late final 12 months, CareMax additionally filed for chapter, saying it was dragged down by Steward’s collapse, given it served because the unique value-based managed service group throughout Steward’s community.
