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Clawback of money looted by Cerberus, de la Torre, and MPT from Steward Health Care

Summary:
The third and best source of funds would be a clawback of money looted by Cerberus, de la Torre, and MPT, based on a prosecution for fraudulent conveyance, misrepresentation to shareholders, and other possible criminal charges. As a settlement, restitution would have to be paid to the hospitals, under new ownership. That may yet come, but it would require more aggressive action than we have seen from the state attorney general, Andrea Campbell, to date. This is surprising, because Campbell is generally respected as tough and progressive. But this week, Campbell said, in a statement on Twitter no less, “My office is working to get answers and we intend to seek accountability for any laws that may have been violated.” Back in February, as

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The third and best source of funds would be a clawback of money looted by Cerberus, de la Torre, and MPT, based on a prosecution for fraudulent conveyance, misrepresentation to shareholders, and other possible criminal charges. As a settlement, restitution would have to be paid to the hospitals, under new ownership.

That may yet come, but it would require more aggressive action than we have seen from the state attorney general, Andrea Campbell, to date. This is surprising, because Campbell is generally respected as tough and progressive. But this week, Campbell said, in a statement on Twitter no less,

“My office is working to get answers and we intend to seek accountability for any laws that may have been violated.”

Back in February, as Steward’s financial troubles worsened, Campbell issued a similar statement. But Steward’s legally dubious maneuvers have been hidden in plain view for years, crying out for investigation long before it declared bankruptcy.

One Massachusetts Democrat who is not mincing words is Sen. Elizabeth Warren. Warren . . . “Regulators need to seek all possible means to claw back the riches sucked out of these hospitals. No matter where they try to shift the blame, Steward executives are responsible for this crisis.”

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Boston, MA — Today, United States Senator Elizabeth Warren (D-Mass.) released the following statement regarding Steward Health Care’s bankruptcy:

“Steward Health Care’s bankruptcy is a direct consequence of Wall Street private equity vultures looting our health care system. My first priority is keeping these Massachusetts hospitals open, protecting patients, and supporting frontline health care workers. The next step should be a serious reexamination of whether we should allow private equity in health care. Steward is just the latest example of private equity endangering communities, and I will be introducing new legislation in the Senate to hold corporate actors accountable when they loot our hospitals to boost their profits.

“After years of disastrous decisions, CEO Ralph de la Torre should be fired, along with Steward’s entire executive team. Regulators need to seek all possible means to claw back the riches sucked out of these hospitals. No matter where they try to shift the blame, Steward executives are responsible for this crisis. I will be closely monitoring this bankruptcy process, and I commend Governor Healey, Attorney General Campbell, and Secretary Walsh for their leadership.”

Senator Warren is one of the nation’s leading bankruptcy experts, and has been leading congressional oversight of Steward’s failures. Warren has repeatedly called out the harms of private equity ownership on health care costs and quality of care and has fought to prevent companies from taking advantage of the bankruptcy system: 

  • On April 19, 2024, Senators Warren and Senator Markey (D-Mass.) sent a letter to six private credit funds that are holders of Steward’s debt, asking them a series of questions about their loans and calling on them to offer loan modifications that could potentially help keep the hospitals afloat.
  • On April 16, Senators Warren and Markey called out Medical Properties Trust and Macquarie Infrastructure Partners for exploiting Steward Hospitals, and urged them to help keep the hospitals open.
  • On April 8, 2024, Senators Warren, Markey, and the rest of the MA delegation urged the FTC and DOJ to closely scrutinize UnitedHealth Group’s proposed acquisition of Steward Health Care’s physician group, Stewardship Health.
  • On April 3, 2024, Senator Warren delivered remarks at a Senate hearing in Boston titled, “When Health Care Becomes Wealth Care: How Corporate Greed Puts Patient Care and Health Workers at Risk,” which centered on Steward Health Care’s Massachusetts hospitals.
  • On March 26, 2024, Senator Warren released a statement about Steward’s plan to sell its physician group Stewardship Health to UnitedHealth Group’s subsidiary Optum.
  • On March 26, 2024, Senators Warren and Markey sent a letter to Steward CEO and Chairman Dr. Ralph de la Torre, calling on him to testify at a congressional hearing in Boston.
  • On March 8, 2024, Senators Warren and Markey sent a letter to Dr. de la Torre, blasting him for years of financial mismanagement, private equity schemes, and executive profiteering that have led to Steward Health Care’s financial crisis.
  • On February 15, 2024, Senators Warren and Markey, along with all nine members of the Massachusetts congressional delegation, sent a letter to Cerberus seeking answers from the private equity firm for its role in creating the current financial challenges at Steward hospitals.
  • On January 29, 2024, Senator Warren released a statement about Steward’s financial situation and allegations of patient neglect at Steward facilities.
  • On January 23, 2024, Senator Warren led the Massachusetts congressional delegation in a letter to the CEO of Steward Health Care pressing the company to brief them on Steward’s financial position, the status of their Massachusetts facilities, and their plans to ensure the communities they serve are not abandoned. 

Enough said . . .

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