The private-equity deal that flattened a hospital chain and its landlord

The private-equity deal that flattened a hospital chain and its landlord
Wall Street Journal; by Jonathan WeilFollow; 5/7/24
Cerberus made a big profit, but Steward went bankrupt and its landlord suffered big losses. In the spring of 2020, Cerberus Capital Management was faced with a tricky financial situation. It owned a struggling hospital chain that needed $400 million to dig out of a deep financial hole, but Cerberus wanted to sell rather than invest more. The deal helped shape much of what followed for Steward Health Care System over the next four years, culminating this week in the Chapter 11 filing of Steward, one of the biggest hospital bankruptcies in U.S. history. ... The 2020 deal paved the way for Cerberus to sell its majority stake in Steward to the hospital chain’s chief executive and others and lock in an eventual $800 million profit. It bought time for the CEO and new majority owner, Dr. Ralph de la Torre, who received a big cash payout himself the next year.