Steward Health Care Has Filed for Chapter 11 Bankruptcy
Throughout 2023 and 2024, a growing number of companies have filed for Chapter 11 bankruptcy, with healthcare companies starting to become one of the types of companies to add to that list.
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While some companies can come out of a Chapter 11 filing as financially secure, Steward Health Care’s filing is a little more complex. The filing indicated it has more than 100,000 creditors, and a judge in Texas has granted the company a complex case designation.
Steward Health Care Is $9 Million in Debt
Steward Health Care has managed to amass quite a large debt. It is currently $9 million in the red and is struggling to find ways to pay back this money owed.
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The company has come up with some plans to carry out so it can pay back some, or hopefully all, of the money owed. However, due to being millions of dollars in debt, this has left some employees worried that they haven’t received their paychecks due to the debt.
Steward Health Care Needs a $300 Million Loan
After filing for bankruptcy in early May 2024, Steward Health Care has revealed that it is seeking a $300 million loan from Medical Properties Trust to help keep it afloat.
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This comes after there has been growing concern across America about what the healthcare system could look like, as the hospital operator has around 30 hospitals across the whole country. Should they close down, it will leave many without the healthcare they need.
Steward Health Care’s President Addressed Employees
Steward Health Care’s employees raised the alarm that they had not received their much needed paychecks in their bank accounts.
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The company’s president wrote to employees in a letter, telling them that they had received their reports of not receiving their paychecks and that they were looking into the problem and trying to solve it.
Steward Health Care Blamed Bank of America
In his letter to his employees, President Mark Rich said that the reason employees hadn’t received their paychecks yet was a processing error in Bank of America’s system.
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Rich assured employees he had followed the bank’s correct procedure following the Chapter 11 bankruptcy filing and that the paychecks should be processed within the next 24 to 48 hours. He also urged employees to keep checking their bank accounts for any updates.
Steward Health Care Employs Over 30,000 People
With the recent Chapter 11 bankruptcy filing and employees not receiving their paychecks, this has been a great concern to many, as Steward Health Care employs over 30,000 people.
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The company also has 33 community hospitals over 9 states, cares for 2.2 million patients yearly, and has more than 12 million patient encounters every year. So, the bankruptcy filing has naturally been a concern for them.
Steward Health Care Will Sell Some of Its Hospitals
As they have had to file for Chapter 11 bankruptcy, the company has struggled to find ways to make more money to keep employees in their jobs.
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As a result, the company has agreed to a date at the end of June 2024, where it will auction off some of its hospitals to try to make back some of the money it owes. However, this comes as a worry to its employees and patients as they don’t know whether they will retain their jobs or be able to access the care they have received for many years.
Steward Health Care Employees Could Incur Fines
One of the main worries that many Steward Health Care employees had was about having to pay any fines as a result of their paychecks not being cleared on time.
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However, the company’s President has assured his employees the company is planning on covering any fines that are incurred so they don’t feel the extra financial burden.
Steward Health Care Employees Are Threatening to Walk Out
Due to not receiving their paychecks, many Steward Health Care employees are threatening the company with staging a walk-out if they do not receive their paychecks as they were promised in 24 hours.
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While the company has assured that it is unlikely to get to this stage, many employees are not wholly convinced they will receive their paychecks to pay their bills on time.
Some Steward Health Care Employees Have Received Their Paychecks
Despite the delay in pay for many employees, others have started to see their paychecks and benefits enter their bank accounts.
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This will likely come as somewhat of a relief to those employees who are yet to receive their paychecks because they know that the money is coming, but it might be a little more delayed.
Steward Health Care Is Under Fire
Due to being in debt and filing for Chapter 11 bankruptcy, Steward Health Care has come under fire from local and federal elected officials, who are worried that the bankruptcy outcome could affect the millions of people who rely on its hospitals across America.
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Since a judge has ruled the company will have to sell all of its hospitals at auction, officials are worried about whether buyers will keep the hospitals or change them into something else and what this might mean for employees and patients.