Private Equity Stakeholder Project (PESP) – Statement for the Record

The document details the decline of Steward Health Care, from its 2010 acquisition by Cerberus Capital Management to its May 2024 Chapter 11 bankruptcy. It highlights a pattern of 'asset stripping' and 'sale-leaseback' transactions with Medical Properties Trust (MPT) that allowed investors to extract hundreds of millions in dividends while the health system faced severe understaffing, equipment repossessions, and patient deaths. The author argues that an ineffective regulatory landscape enabled this 'pillaging,' leading to the closure of multiple hospitals across several US states and recommending strict new laws on hospital ownership, financial transparency, and dividend payouts.

• Steward Health Care filed for Chapter 11 bankruptcy on May 6, 2024, reporting more than $9 billion in total liabilities, with $6.6 billion consisting of long-term lease obligations to Medical Properties Trust (MPT).
• Private equity firm Cerberus Capital Management extracted significant profits from Steward, reportedly making at least $800 million during its decade of ownership (2010-2020), including a $484 million dividend from a 2016 real estate deal.
• The partnership with Medical Properties Trust (MPT) utilized sale-leaseback transactions to monetize hospital real estate, which the document argues allowed investors to siphon money out of the system while burdening hospitals with millions in lease payments.
• Financial mismanagement and asset stripping led to a patient care crisis between 2019 and 2024, resulting in at least 15 patient deaths and 16 injuries, including a case where a mother died because a necessary embolization coil had been repossessed due to unpaid bills.
• CEO Ralph de la Torre is accused of using company funds for personal luxury and non-business expenses, including a $10 million contribution to a Texas private school, a $40 million yacht, and $161,020 in non-business flights in the year before bankruptcy.
• Steward's financial distress led to the closure of at least eight hospitals in the US, causing thousands of layoffs and reducing healthcare access in Massachusetts, Texas, Arizona, and Ohio.
• The document argues that the crisis was enabled by a regulatory failure where real estate transactions in healthcare are largely unregulated, allowing major financial decisions to bypass oversight.

APA

Bugbee, M. (2024). Private Equity Stakeholder Project (PESP) – Statement for the Record. Private Equity Stakeholder Project. https://pestakeholder.org/wp-content/uploads/2024/09/PESP_September-12-2024-PESP-HELP-Committee-Testimony.pdf

Chicago

Bugbee, Mary. Private Equity Stakeholder Project (PESP) – Statement for the Record. Private Equity Stakeholder Project, 2024. https://pestakeholder.org/wp-content/uploads/2024/09/PESP_September-12-2024-PESP-HELP-Committee-Testimony.pdf.

Wikipedia

{{cite press release |last1=Bugbee |first1=Mary |title=Private Equity Stakeholder Project (PESP) – Statement for the Record |publisher=Private Equity Stakeholder Project |date=12 September 2024 |url=https://pestakeholder.org/wp-content/uploads/2024/09/PESP_September-12-2024-PESP-HELP-Committee-Testimony.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{bugbee2024private, author = {Bugbee, Mary}, title = {{Private Equity Stakeholder Project (PESP) – Statement for the Record}}, publisher = {Private Equity Stakeholder Project}, year = {2024}, month = sep, url = {https://pestakeholder.org/wp-content/uploads/2024/09/PESP_September-12-2024-PESP-HELP-Committee-Testimony.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }