Steward Health Care, the US healthcare giant embroiled in the ‘fraudulent’ privatisation of three of Malta’s public hospitals, is filing for bankruptcy, the company announced on Monday.
In a statement, the company said that “it has commenced an in-court restructuring process through the filing of voluntary petitions for relief” in a Texas court.
Steward CEO Ralph de la Torre said that a “primary factor” in its decision to file for bankruptcy was “Steward continuing to face challenges created by insufficient reimbursement by government payors as a result of decreasing reimbursement rates”.
“Filing for Chapter 11 restructuring is in the best interests of our patients, physicians, employees, and communities at this time,” he said.
Steward currently runs over 30 hospitals across the US, but has become increasingly embattled in recent years as its debts racked up.
A 'fraudulent' takeover, culminating in a magisterial inquiry
Steward became a household name in Malta in early 2018, when it took over the concession that had awarded St Luke’s Hospital, Karin Grech Hospital and Gozo General Hospital to Vitals Global Healthcare.
The concession was annulled by Malta’s courts last year, under the suspicion of fraud. The decision to scrap the concession was confirmed on appeal, with courts finding “"collusion between Steward and senior government officials or its agencies".
Steward and the Maltese government have since been locked in arbitration proceedings.
The saga took a new turn last week, as news broke that a magisterial inquiry into the role of Joseph Muscat and several other public officials in the deal had been completed.
The inquiry spells bad news for many of the saga’s most prominent faces. On Tuesday, Muscat said that he expects to be charged, while others, including EU Funds Minister Chris Fearne and Central Bank Governor Edward Scicluna are also expected to face lesser charges.
Muscat, who has long been fighting to have the inquiring magistrate Gabriella Vella removed from the case, described the case as a personal “vendetta”. Meanwhile, Fearne insisted that he had never broken any law or ministerial ethics.
Developments across the pond
In a press conference in the US on Monday, Massachusetts state governor Maura Healey delivered a broadside against Steward's management following news the company had filed for bankruptcy.
“This situation stems from and is rooted in greed, mismanagement and lack of transparency on the part of Steward leadership in Dallas,” she said, as reported by Boston 25 News.
According to the news network, Steward employs 16,000 workers in the state and caters for 200,000 patients annually.
While reassuring state residents that hospitals operated by the company would be “operating as usual,” Healey said she could not guarantee there wouldn’t be disruptions.
Commenting on the bankruptcy, she said: “Ultimately, this is a goal of getting Steward out of Massachusetts.”
Last week, the state activated its ‘Incident Command System’ to maintain patient access to Steward healthcare facilities.
Steward’s demise follows the company's announcement last month it was closing its New England Sinai Hospital in the state after announcing in January the centre's financial performance had plummeted by 1,600% over the past five years.
The company blamed “skyrocketing expenses” for the decision and said it owed around $50 million in unpaid rent, according to Boston 25 News.