Ralph de la Torre, a Cuban-American entrepreneur and CEO of Steward Health Care, is set to testify before a U.S. Senate committee following the company's bankruptcy declaration. On Thursday, the committee voted to authorize an investigation into the bankruptcy of Steward Health Care and issued a subpoena for de la Torre to testify, according to Local 10.
De la Torre, whose parents are Cuban, is the founder and primary shareholder of the company. In 2021, Steward Health Care purchased five hospitals in South Florida for $1 billion: Coral Gables Hospital, Florida Medical Center, Hialeah Hospital, North Shore Medical Center, and Palmetto General Hospital.
The subpoena compels him to appear before the Senate Committee on Health, Education, Labor, and Pensions on September 12, after he declined a previous invitation to testify in June made by committee chairman, Senator Bernie Sanders, and Republican Bill Cassidy.
De la Torre also refused to attend a hearing in Boston led by Democratic Senator Edward Markey. In May, Steward announced plans to sell all its hospitals following its bankruptcy declaration. Sanders criticized the bankruptcy announcement as an example of the dangers of allowing private equity executives to acquire hospitals, burden them with debt, and sell off their assets.
The senator claimed that de la Torre enriched himself by indebting hospitals and selling their properties to real estate executives who charged unsustainable rents. As a result, Steward and its 30 hospitals in eight states declared bankruptcy with $9 billion in debt.
Steward Health Care stated that it plans to comply with the subpoena and that the bankruptcy process is being overseen by various regulatory agencies and creditors. The company is also under investigation in Malta and has raised concerns among political figures in Massachusetts, including Democratic Governor Maura Healey.
On Tuesday, Healey mentioned that the state is evaluating offers for Steward's hospitals in Massachusetts. Markey emphasized that owning a hospital entails additional responsibilities and criticized the application of corporate standards to healthcare facilities.
Dallas-based Steward assured that it does not expect any interruptions in the daily operations of its hospitals during the Chapter 11 bankruptcy process. The company indicated in court documents that it has been in the process of selling its hospital facilities since January.
Steward operates eight hospitals in Massachusetts, including St. Elizabeth’s and Carney, both located in Boston. The bankruptcy was filed in the Southern District of Texas Bankruptcy Court.
Following the bankruptcy declaration, de la Torre stated in a press release that Steward Health Care has done everything possible to operate successfully in a challenging healthcare environment. A group of Democratic congressmen, led by Markey, has sought assurances that Steward hospital workers will retain their health and retirement benefits.
Key Questions About Steward Health Care's Bankruptcy
In light of the recent developments concerning Steward Health Care's bankruptcy, here are some important questions and answers that provide further insight into the situation.
Why is Ralph de la Torre being subpoenaed by the Senate?
Ralph de la Torre is being subpoenaed to testify before the Senate Committee on Health, Education, Labor, and Pensions regarding the bankruptcy of Steward Health Care, as he is the CEO and primary shareholder of the company.
What led to Steward Health Care's bankruptcy?
Steward Health Care declared bankruptcy due to accumulating $9 billion in debt, partly as a result of acquiring and indebting hospitals and selling their properties to real estate executives charging high rents.
What is the impact of the bankruptcy on Steward's hospital operations?
Steward Health Care has assured that there will be no interruptions in the daily operations of its hospitals during the Chapter 11 bankruptcy process.
How has the state of Massachusetts responded to the bankruptcy?
Massachusetts has been evaluating offers for Steward's hospitals in the state, and political figures like Governor Maura Healey have expressed concerns over the situation.