Small Business Funding

Representatives of Steward Health Care, lenders and a landlord continued to negotiate in an unusual weekend hearing ahead of a looming deadline to sell Steward Health Care’s remaining Massachusetts hospitals.Sunday’s hearing conducted by a federal bankruptcy court judge in Texas offered new insights into the high-pressure negotiations and hinted that Massachusetts could be required to put up millions of dollars more to make the deals happen. The state is already on the hook for $511 million over several years. Transactions facing a deadline of Oct. 1 include Lifespan’s purchase of Morton Hospital and Saint Annes Hospital; Lawrence General Hospital’s purchase of Holy Family Hospital-Methuen and Holy Family Hospital-Haverhill; and Boston Medical Center’s purchase of Good Samaritan. The purchase agreements were originally announced in late August, but parties continued to argue on Sunday what lenders should be paid and where the money should come from.During the hearing, a representative of Steward warned that it was “critical” to allow the sales to close because, after Monday, the buyers could potentially walk away from their offers. Also, state funding to keep the hospitals afloat will run out at the end of the month. Much of the negotiations Sunday, however, happened in private communications and not in the judge’s virtual courtroom. The hearing ended after Steward’s attorney told the judge they were working with the state of Massachusetts and others to guarantee $5 million in benefits to the lenders. He also promised on the record to work toward revising terms with the lenders and to sell properties adjacent to the hospitals to fund payments to lenders. Judge Christopher Lopez ordered that updated copies of sale documents be submitted for him to sign and urged all sides of the case to continue pushing to meet the deadline. “Let’s get these sales done, folks,” he said. Massachusetts officials have already confirmed plans to spend at least $417 million to support the hospitals over three years after they transfer to new ownership and the state spent another $72 million to keep the facilities open through August and September. Steward filed for Chapter 11 bankruptcy protection on May 6. Gov. Maura Healey on Friday formally seized St. Elizabeths Medical Center in Boston for $21.9 million through eminent domain to keep the hospital open. BMC will become that hospital’s new operator. “We need to make sure that St. Elizabeth’s here in Brighton is on solid ground and that the eminent domain transaction that made it possible for Boston Medical Center to step in, that that is going to be sanctioned and finalized. I’m really grateful to the state for moving forward with that,” Boston Mayor Michelle Wu said. During Sunday’s hearing, a representative of BMC told the judge that his organization is paying just $1 for the operating assets of each of the two hospitals. He said the hospitals actually have negative financial value and that their agreement to run the facilities is predicated on their agreement with the state to continue providing funding. Carney Hospital and Nashoba Valley Medical Center closed at the end of August after Steward did not find qualified bidders.The future of Norwood Hospital, which was under construction, remains unclear.Steward CEO Dr. Ralph de la Torre, who was previously the CEO of Boston-based Caritas Christi Health Care and a cardiac surgeon at Beth Israel Deaconess Medical Center, is leaving the company effective Oct. 1.