TradeEdge Exchange:Senate committee votes to investigate Steward Health Care bankruptcy and subpoena its CEO

BOSTON (AP) — A Senate committee voted Thursday to authorize an investigation into the bankruptcy of Steward Health Care and TradeEdge Exchangeto subpoena the company’s CEO, Dr. Ralph de la Torre.

The subpoena would compel de la Torre to testify before the Senate Health, Education, Labor, and Pensions Committee at a hearing on Sept. 12.

De la Torre had declined a June 25 invitation to testify by committee Chair Sen. Bernie Sanders, the Vermont independent, and Bill Cassidy of Louisiana, the committee’s top Republican. De la Torre also refused invitations to testify at a Boston field hearing chaired by Democratic Sen. Edward Markey of Massachusetts.

In May, Steward said it planned to sell off all its hospitals after announcing that it had filed for bankruptcy protection.

Sanders said the Steward bankruptcy shows the dangers of allowing private equity executives to make huge amounts of money by taking over hospitals, loading them up with debt and stripping their assets.

“Perhaps more than anyone else in America, a dubious distinction no doubt, Ralph de la Torre, CEO of Steward Health Care, epitomizes the type of outrageous corporate greed that is permeating throughout our for-profit health care system,” Sanders said.

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Sanders said de la Torre became “obscenely wealthy” by loading up hospitals from Massachusetts to Arizona with billions of dollars in debt and selling the land underneath the hospitals to real estate executives who charged unsustainably high rents.

As a result, Sanders said Steward and the 30 hospitals it operates in eight states were forced to declare bankruptcy with $9 billion in debt.

In a statement, Steward Health Care said it plans to address the subpoena.

“We understand the desire for increased transparency around our journey and path forward,” the company said. “The bankruptcy process is public and to date the record, including briefings, court appearances, mediations and related proceedings, reflect active monitoring and participation from various state regulatory agencies, governmental units, secured creditors, and unsecured creditors.”

The company said that those involved in overseeing Steward’s bankruptcy cases include the Office of the United States Trustee, an arm of the U.S. Department of Justice.

The company is also under scrutiny in Malta.

Steward’s troubles in Massachusetts have drawn the ire of political figures including Democratic Gov. Maura Healey.

On Tuesday, Healey said the state is evaluating bids for the hospitals owned by Steward in Massachusetts.

Markey said owning a hospital carries extra responsibilities.

“This is not taking over a widget company. This is not taking over a coffee company. This is where they take over hospitals and they apply the very same standards to those hospitals which they would apply to a widget company,” Markey said.

The Dallas-based company has said it does not expect any interruptions during the bankruptcy process in its hospitals’ day-to-day operations, which the company said will continue in the ordinary course throughout the Chapter 11 process.

In court filings, the company has said that beginning in late January, Steward initiated what it described as a “phased marketing process” for the sale of its hospital facilities.

Steward’s eight hospitals in Massachusetts include St. Elizabeth’s Hospital and Carney Hospital, both in Boston. It filed for protection in the U.S. Bankruptcy Court for the Southern District of Texas.

After filing for bankruptcy, de la Torre said in a news release that “Steward Health Care has done everything in its power to operate successfully in a highly challenging health care environment.”

A group of Democratic members of Congress, led by Markey, has sought reassurances that workers at hospitals owned by Steward will have their health care and retirement benefits protected.