Steward Health Care Files Lawsuit Against Former Executives
Steward Health Care has initiated legal action against its former executives, including the former CEO, alleging that they engaged in fraudulent activities that cost the company millions of dollars. This lawsuit was revealed through a recent bankruptcy filing, which outlines claims that key leaders prioritized personal gain over the interests of the company, its creditors, and patients.
The lawsuit states that former CEO Ralph De la Torre and other top officials allegedly managed Steward with the intent of enriching themselves at the expense of the company’s stakeholders. The filing emphasizes that these actions were driven by greed and bad faith, causing significant harm to the organization and the communities it served.
In response to the allegations, a spokesperson for De la Torre stated that he will challenge the claims. “Dr. de la Torre disputes the allegations of wrongdoing and will vigorously defend himself against them,” the statement said.
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According to the lawsuit, De la Torre received $81.5 million from a $111 million dividend paid in January 2021, when Steward was already financially unstable. Shortly after, he reportedly purchased a $30 million superyacht, which he continues to use today.
Additionally, De la Torre is accused of overseeing a $1.1 billion deal in 2021 for five Miami-area hospitals, where Steward allegedly overpaid significantly. The suit also claims that he orchestrated a 2022 transaction in which $134 million from the sale of certain assets was transferred to an outside entity that was indirectly owned by Steward insiders.
Impact of Bankruptcy on Steward Facilities
Following the revelation of unpaid rent obligations, Steward filed for bankruptcy last year, triggering a rush to sell its Massachusetts hospitals. Boston Medical Center (BMC) has taken over two of the facilities: Good Samaritan Medical Center, now known as BMC South, and St. Elizabeth’s Medical Center, now known as BMC Brighton, in Brighton.
Four other former Steward facilities are now operated by new hospital groups. Lifespan manages Morton Hospital and St. Anne’s Hospital, while Lawrence General Hospital oversees Holy Family Hospital-Methuen and Holy Family Hospital-Haverhill.
Two additional Steward facilities, Carney Hospital and Nashoba Valley Medical Center, closed at the end of August 2024 after the company failed to find qualified bidders. Norwood Hospital, which was under reconstruction due to a severe flood, remains incomplete. However, local officials continue working to secure an operator to eventually reopen the facility.
Ongoing Legal and Community Efforts
The legal battle between Steward Health Care and its former executives highlights broader concerns about corporate accountability and financial mismanagement within the healthcare sector. As the case unfolds, it will be closely watched by stakeholders, including patients, employees, and investors.
The ongoing efforts to restructure and operate former Steward facilities demonstrate the resilience of the healthcare community in the face of such challenges. Local officials and hospital groups are working diligently to ensure that essential services remain available to the public.
As the situation develops, further updates on the legal proceedings and the status of Steward’s facilities will be important for understanding the long-term implications of this case.
