All 11 members of the Massachusetts delegation in D.C. signed a letter Thursday to Cerberus Capital Administration, the non-public fairness agency that owned Steward Well being Care hospitals from 2010 to 2021, in search of data amid “rising considerations” in regards to the troublesome monetary scenario Steward now finds himself in. .
“We’re significantly involved by the extent to which Cerberus and its associates actually stripped and offered the property beneath these hospitals, creating lots of of thousands and thousands of in earnings for personal fairness executives, whereas leaving the amenities with long-term liabilities which are magnifying, if not creating, the present disaster,” the delegation wrote. “Now we have lengthy been involved in regards to the dire position of personal fairness in our economic system. Possession by non-public fairness traders will increase well being care prices and reduces the standard of care, and personal fairness companies have performed a task within the collapse of hospitals all through the nation, damaging “
The delegation letter particularly asks Cerberus to offer responses relating to the corporate's investments in Steward and Steward-affiliated entities, the liabilities imposed on Steward, and the earnings, dividends and complete compensation of the corporate and its senior executives by the 28th. of February. The corporate didn’t reply to a request for remark Thursday from the Information Service.
Cerberus purchased a part of the hospital system identified on the time as Caritas Christi in 2010, investing $246 million and renaming it Steward. In 2016, Cerberus-owned Steward reached a $1.25 billion cope with actual property funding belief Medical Properties Belief by which Steward's hospital properties have been offered to MPT and MPT acquired a 5 p.c fairness stake in Steward, the delegation mentioned.
Well being officers say they’re getting ready for hospital closures if the beleaguered Steward Well being Care system continues to battle.
The letter says the transaction repaid Cerebus' preliminary funding, however left Steward with multi-million-dollar, multi-year lease funds that at the moment are an enormous a part of the system's monetary struggles. Cerebus started transferring its possession curiosity in 2020 and Steward borrowed $355 million as a part of that transaction, the delegation mentioned.
“The web results of these transactions seems to be an unfolding tragedy,” the delegation wrote. “Cerberus and its non-public fairness executives obtained $800 million in earnings, whereas the roles of 1000’s of Massachusetts healthcare employees are in danger and ten communities within the Commonwealth face the doable closure of hospitals which are in debt, unable to pay your payments and “You might be on the point of monetary abyss. “He owes Congress and the general public solutions and an evidence for his actions.”