A Texas bankruptcy court on Wednesday approved the closure of two Steward Health Care Massachusetts hospitals.
Steward plans to close Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer by Aug. 31, as the bankrupt for-profit system works to sell six other Massachusetts hospitals. Judge Christopher Lopez of the U.S. Bankruptcy Court for the Southern District Court of Texas said during a hearing Wednesday that keeping those hospitals open jeopardized the viability of the system's hospital network in Massachusetts.
Related: Steward Health Care to close more Massachusetts hospitals
During the hearing, Lopez acknowledged the negative consequences for patients and workers in those communities, but said the legal standards to close those hospitals had been met. Even if those facilities didn’t have to pay rent, they would still lose money on operations, Lopez said.
The Carney and Nashoba hospitals have accrued losses of more than $17 million in earnings before interest, taxes, depreciation and amortization from January to May, a July 26 filing shows. The other six Commonwealth hospitals have recorded EBITDA losses of more than $63 million through that period, according to the filing.
Legal representatives for Steward said during the hearing the bids it received for Carney and Nashoba were not viable.
Lopez also delayed a ruling until Tuesday on a $30 million offer from state officials seeking to keep the six hospitals that have received qualifying bids afloat. The payment would be an advance on Medicaid funds the state owes Steward hospitals, state officials said. However, the state won’t provide the funding until Steward signs an acquisition agreement.
In addition, Lopez rejected a $114 million annual master lease agreement between Steward’s eight Massachusetts hospitals and their landlords, requiring prospective buyers to negotiate a new lease. On Tuesday, Massachusetts lawmakers sent a letter to Steward and its landlords, urging the landlords to free Steward's Massachusetts hospitals from their "onerous" lease obligations that "may dissuade potenial buyers."
Dallas-based Steward, a national 31-hospital system that filed for Chapter 11 bankruptcy protection in May, has been soliciting bids for its entire network and physician group in bankruptcy.
