August 08, 2024

Warren, Markey Push Apollo Global Management on Role in Steward Health Care’s Demise, Call on the Company to Provide Relief from Onerous Leases

Apollo is Now “Sole Negotiator” Controlling the Fate of Steward Hospital Properties

Text of Letter (PDF)

Washington, D.C. – U.S. Senators Elizabeth Warren (D-Mass.) and Ed Markey (D-Mass.) requested information from private equity firm Apollo Global Management (Apollo) on the company’s role in Steward Health Care’s (Steward’s) bankruptcy, and urged Apollo to work in good faith to facilitate the sale of Steward’s Massachusetts hospitals. 

“Apollo has had a shadowy role in Steward’s leases for years,” said Sen. Warren, “Now it is time for Apollo to step into the light, and act quickly to negotiate with prospective buyers so that the hospitals can remain open and serve the people of Massachusetts.”

Steward filed for bankruptcy following years of mismanagement and profiteering by its executive team, led by Ralph de la Torre, private equity firm Cerberus Capital Management (Cerberus), and corporate landlords Medical Properties Trust (MPT) and Macquarie Investment Partners (MIP). 

“Apollo’s role in the ongoing Steward bankruptcy has thus far received little scrutiny,” wrote the senators. “But in 2022, your firm provided a $920 million loan to MIP and MPT – secured by the hospitals – when those two companies created the joint venture that resulted in MIP’s 50% partnership in the Massachusetts leases.”  

These leases saddled Steward’s hospitals with massive financial obligations. Steward’s hospitals entered bankruptcy with billions of dollars of debt resulting from the leases they were forced into as a result of MPT, MIP, and Apollo’s corporate financial engineering. 

The bankruptcy court approved a rejection of the Massachusetts Master Lease at a hearing on July 31. As buyers of Steward’s Massachusetts hospitals negotiate new leases or reach deals to buy the properties, these new developments have left Apollo as the “fulcrum” of negotiations.

“Last week, a federal bankruptcy judge approved Steward’s request to close Carney Hospital and Nashoba Valley Medical Center, two of the eight Steward properties in Massachusetts,” continued the senators. “The fate of the remaining six hospitals remains uncertain while bid negotiations continue – in large part because potential buyers had been unwilling to assume the onerous leases held by MPT and MIP.”

And earlier this week, MPT and MIP, “agreed to turn (the lease) over to (Apollo) leaving lease negotiations with prospective buyers in the hands of … Apollo.”

“Given . . . Apollo’s role as the ‘fulcrum’ in these negotiations, we ask that you work in good faith with Steward, Massachusetts officials, and other stakeholders to facilitate the sale of the remaining six Steward hospitals in Massachusetts to operators that will continue serving their communities,” concluded the senators.

Senator Warren is one of the nation’s leading bankruptcy experts, and has been leading congressional oversight of Steward’s failures. Warren has repeatedly called out the harms of private equity ownership on health care costs and quality of care and has fought to prevent companies from taking advantage of the bankruptcy system: 

  • In July 2024, Senators Warren and Markey (D-Mass.) wrote to Medical Properties Trust (MPT) and Macquarie Infrastructure Partners (MIP) ahead of the bid deadline for Steward’s Massachusetts hospitals, urging them to offer lease concessions to ensure that new operators can be found to keep Steward’s eight Massachusetts hospitals open and viable.   
  • In June 2024, Senators Warren and Markey (D-Mass.) introduced the Corporate Crimes Against Health Care Act of 2024 to root out corporate greed and private equity abuse in the health care system
  • In June 2024, Senators Warren, Brown (D-Ohio), and Markey (D-Mass.), called for the U.S. Trustee Program (USPT) to move to appoint a Chapter 11 trustee to run the company in place of Steward’s current management as quickly as possible, and to monitor the hospitals’ bankruptcy proceedings to protect patients and local communities. 
  • In May 2024, Senator Warren sent a letter to the U.S. Department of Health and Human Services and the U.S. Centers for Medicare & Medicaid Services, urging them to support communities and health care providers affected by the crisis caused by Steward’s financial mismanagement.
  • In April 2024, Senators Warren and Senator Markey (D-Mass.) sent a letter to six private credit funds that are holders of Steward’s debt, asking them a series of questions about their loans and calling on them to offer loan modifications that could potentially help keep the hospitals afloat.
  • In April 2024 Senators Warren and Markey called out Medical Properties Trust and Macquarie Infrastructure Partners for exploiting Steward Hospitals, and urged them to help keep the hospitals open.
  • In April 2024, Senators Warren, Markey, and the rest of the MA delegation urged the FTC and DOJ to closely scrutinize UnitedHealth Group’s proposed acquisition of Steward Health Care’s physician group, Stewardship Health.
  • In April 2024, Senator Warren delivered remarks at a Senate hearing in Boston titled, “When Health Care Becomes Wealth Care: How Corporate Greed Puts Patient Care and Health Workers at Risk,” which centered on Steward Health Care’s Massachusetts hospitals.
  • In March 2024, Senator Warren released a statement about Steward’s plan to sell its physician group Stewardship Health to UnitedHealth Group’s subsidiary Optum.
  • In March 2024, Senators Warren and Markey sent a letter to Steward CEO and Chairman Dr. Ralph de la Torre, calling on him to testify at a congressional hearing in Boston.
  • In March 2024, Senators Warren and Markey sent a letter to Dr. de la Torre, blasting him for years of financial mismanagement, private equity schemes, and executive profiteering that have led to Steward Health Care’s financial crisis.
  • In February 2024, Senators Warren and Markey, along with all nine members of the Massachusetts congressional delegation, sent a letter to Cerberus seeking answers from the private equity firm for its role in creating the current financial challenges at Steward hospitals.
  • In January 2024, Senator Warren released a statement about Steward’s financial situation and allegations of patient neglect at Steward facilities.
  • In January 2024, Senator Warren led the Massachusetts congressional delegation in a letter to the CEO of Steward Health Care pressing the company to brief them on Steward’s financial position, the status of their Massachusetts facilities, and their plans to ensure the communities they serve are not abandoned. 

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