Cerberus Capital Management and Steward, 2010–2026

analysisCerberus Capital Management, L.P. was one of five private equity firms that Caritas Christi's adviser, Cain Brothers, approached after the Massachusetts hospital system's letter of intent with Vanguard Health Systems was terminated in December 2009. According to the Massachusetts Attorney General's statement, Cerberus was one of two firms that made presentations in January 2010, and Caritas selected it and signed a letter of intent dated January 23, 2010. The Attorney General found that Caritas board members and senior management had no existing financial interests or business relationships with Cerberus; her statement records that Cerberus had contacted Caritas's chief executive, Ralph de la Torre, in 2009 about potentially hiring him, without any financial relationship being established. An online encyclopedia article, citing a 2024 newspaper report, states that in 2009 de la Torre, seeking investors, met Robert Nardelli, an executive at Cerberus and former CEO of Chrysler and Home Depot, and that the conversation led to a formal proposition for Cerberus to buy Caritas and convert it to a for-profit system; the Attorney General's statement mentions only the hiring contact. ^{1 2}

analysisThe buyer, Steward Health Care System LLC, was described in the Attorney General's October 6, 2010 statement as an affiliate of Cerberus that would acquire substantially all of the health care assets and operations of Caritas Christi and its six hospitals. She found that Steward itself had no direct financial capacity because the transaction would be funded by Cerberus, which had no direct legal obligation to support Steward but would commit hundreds of millions of dollars. Her office's draft pension enforcement letter of October 2010 was addressed to Steward care of Cerberus Capital Management, L.P. in New York, to the attention of W. Brett Ingersoll. Cerberus states that the transaction with Cerberus affiliates and de la Torre's management team closed on November 5, 2010; a newspaper report dated November 8, 2010 described Steward as 'a newly formed affiliate' of Cerberus. ^{1 3 4 5}

analysisHow much of Steward Cerberus owned at the start is not stated in any filing from the time in the record. An October 2024 investigative report based on leaked company records said Cerberus created a new for-profit company as the acquisition vehicle and gained almost full ownership of the business, including hospital operations and real estate, while de la Torre was named CEO and given a nine percent stake. In a June 27, 2025 declaration supporting plan confirmation, Alan J. Carr, an independent manager of Steward Health Care Holdings LLC, called the transaction a $420 million leveraged buyout of Caritas by Cerberus, a characterization that differs from Cerberus's description of its initial equity investment as $246 million and from the Attorney General's 2010 expectation that Steward would operate the system essentially debt-free at closing. ^{6 7 3 1}

analysisCerberus says the 2010 transaction brought about $895 million of fresh capital and financial commitments to the Caritas system, including Steward's agreement to assume pension obligations of up to $495 million and to invest $400 million over four years, and that its initial $246 million equity investment allowed the immediate retirement of about $250 million of Caritas net debt; a November 2010 newspaper report also cited about $895 million, and a February 2024 lawmakers' letter citing press reports repeats the $246 million, which no 2010 filing in the record states. Senators Warren and Markey wrote on March 7, 2024, citing a 2010 press report, that Cerberus made commitments to the Attorney General and state regulators 'only to quickly violate these terms', without specifying which; Cerberus replied that the pension and $400 million capital commitments 'were met, and exceeded'. A research institute's timeline states that the Attorney General's final monitoring report of December 30, 2015 found Steward had overall complied with the terms of the agreement that allowed its creation, while the central system had 'substantial losses'. An October 2024 investigative report said the same report found Cerberus had invested only $246 million of the promised $400 million in capital investments, that there was no evidence of outside investment into the pension program, and that Cerberus never invested the full $895 million promised. The 2015 report is not in the record. ^{3 6 8 4 9 5}

analysisCerberus placed its executives and advisers on Steward's board. Exhibit G to the 2010 transaction filings lists four Cerberus-affiliated initial directors: Arthur H. Halper, Senior Operations Executive at Cerberus Operations and Advisory Company, LLC; W. Brett Ingersoll, Co-Head of Private Equity at Cerberus Capital Management, who was described as a Steward director when the sale closed in November 2010; James T. Lenehan, Senior Operations advisor to Cerberus; and John W. Snow, Chairman of Cerberus since 2006 and the 73rd Secretary of the Treasury. Cerberus stated in 2024 that during its investment the board, led by de la Torre as Chairman, included two independent directors from the original Caritas board and five directors appointed by Cerberus, including Lenehan, and that John Boehner and H.R. McMaster were added in later years; the statement does not say when a fifth Cerberus director was appointed. Schedule A of a Schedule 13D filed by Steward Physician Contracting, Inc. on March 12, 2018 lists, for its indirect parent Steward Health Care System LLC, five persons whose principal occupations were at Cerberus entities: Lenehan, Lisa Gray and Chan Galbato of Cerberus Operations and Advisory Company, and Ingersoll and Michael Palmer of Cerberus Capital Management. ^{1 2 3 4}

analysisAccounts of Cerberus's control differ. The debtors' first-day declaration of May 6, 2024 says Cerberus acquired the six hospitals in partnership with de la Torre, and Senators Warren and Markey wrote in March 2024 that he developed the business model for Steward in which Cerberus then invested; his website calls him one of Steward's founders. The debtors' July 15, 2025 complaint against de la Torre and others, in which Cerberus is not a defendant, states that Cerberus organized the company in 2010 and that in Steward's early years funds managed or advised by Cerberus owned a significant stake and exercised substantial control over company management. It alleges that before May 2020 those funds held a substantial investment in the Class A-1 membership interests of Steward Health Care Investors LLC, the managing member of Steward Health Care Holdings LLC, which was in turn the majority member of Steward Health Care System LLC, and that Cerberus controlled Steward Investment Manager LLC, the Non-Member Manager of that company, giving the funds significant control over all three companies; an undated ownership chart published by an investigative outlet likewise shows investment funds affiliated with Cerberus above Steward Health Care Investors LLC. Cerberus said on September 19, 2024 that the Attorney General, the Massachusetts Department of Health, the Archdiocese of Boston and the Vatican had determined that Cerberus and the management team led by de la Torre presented the best solution for the hospital system, and that during its investment it operated as a shareholder while day-to-day management and operations were led by the CEO and management. No court has ruled on the complaint; its adversary proceeding had reached the discovery-scheduling stage by July 2026. ^{5 6 7 3 8 9 10}

analysisWhen Steward entered its transactions with Medical Properties Trust (MPT), MPT's September 26, 2016 release described Steward as 'owned by its management team' and Cerberus Capital Management and said MPT would invest $50 million in Steward alongside Cerberus and management, gaining certain protective rights concerning Steward's credit decisions and a right of first refusal on future Steward hospitals. According to the same release, a Cerberus affiliate agreed to invest $150 million in MPT's common stock in a private placement concurrent with or soon after closing. Cerberus's 2024 statement describes the September 2016 transaction as $600 million of proceeds from the sale-leaseback (sale and lease-back of hospital real estate) of five of the original six Caritas acute care facilities, $600 million from refinancing mortgages on four other Steward-owned acute care hospitals and a $50 million equity investment by MPT for a 4.9% interest in Steward, with a $1 billion commitment from MPT to fund future capital and strategic investments. ^{1 2}

analysisThe master lease of October 3, 2016 between Medical Properties Trust (MPT) lessors and Steward lessees, filed with the SEC as Exhibit 10.33, treats Cerberus separately. Its definition of a 'Change of Control Transaction' excludes transfers of interests held directly or indirectly by Cerberus Capital Management to funds it controls, as well as transfers among existing holders and transfers by de la Torre to persons in which he owns 51% or more; it provides that neither Cerberus nor its affiliates (other than Steward Health Care System LLC and its subsidiaries) nor de la Torre is deemed an Affiliate of Steward under its 25% ownership test; and in calculating Steward's EBITDAR (earnings before interest, taxes, depreciation, amortization and rent) it adds back any management, monitoring, consulting or advisory fees or expenses paid to Cerberus Capital Management, L.P. or its affiliates, to the extent otherwise permitted under the lease. That clause shows such fees were contemplated; the lease does not state whether any were paid or in what amount. ³

analysisPart of the proceeds of Steward's 2016 transactions with Medical Properties Trust (MPT) went to Cerberus. In its September 19, 2024 statement Cerberus said the transaction gave Steward $460 million in pre-tax liquidity, used to retire $385 million of interest-bearing secured debt, and that part of the proceeds returned Cerberus's equity investment and provided a $473 million dividend, which it called the first and only distribution from Steward to it, while de la Torre and his team received a $71 million dividend; it said Steward was solvent at all times during its ownership. The plan-confirmation declaration of Alan J. Carr, an independent manager of Steward Health Care Holdings LLC, instead puts the October 2016 distribution to certain Cerberus-related entities at about $719.5 million and states that there was a good-faith basis to believe Steward Health Care System LLC was then insolvent and that the debtors had colorable fraudulent-transfer claims against the recipients; that is an account of potential estate claims, not a court finding. An October 2024 investigative report cited internal emails describing a $600 million debt incurred in October 2016 for 'the Cerberus leveraged recap transaction', and Cerberus told the outlet it had not taken a recapitalization dividend. The creditors' litigation trust later called the 2016 payout a fraudulent transfer; no suit was filed, and in mid-July 2026 Cerberus settled with the trust, continuing to deny any wrongdoing. ^{2 4 5 6 7}

analysisCerberus exited in May 2020. It says that after Steward's board decided to raise capital to navigate the COVID-19 pandemic, Steward and Cerberus entered a recapitalization with Medical Properties Trust (MPT) that transferred Cerberus's ownership interest to a management group of Steward physicians led by Ralph de la Torre, that its controlling interest was exchanged for a convertible note, and that the deal was conditioned on $400 million of fresh capital. The debtors' complaint describes the exchange of the Cerberus funds' membership interests in Steward Health Care Investors LLC for a $350 million convertible promissory note, the Cerberus Note, in a transaction that closed on May 12, 2020 and removed Cerberus from ownership; it alleges that de la Torre engineered the exchange and that Cerberus and its funds were concerned at the time about Steward's insolvency, and the declaration of independent manager Alan J. Carr adds that there was no independent valuation of Cerberus's stake. No court has ruled on the complaint. Cerberus said no proceeds were exchanged at the buyout and that the note required no payments before its five-year maturity and was an obligation of affiliates of de la Torre, his management team and MPT, not of Steward's hospital operating company. An October 2024 investigative report quoted a May 2020 presentation to MPT's board as saying the $400 million would keep Steward afloat during Covid and 'provide protection to Cerberus from a possible fraudulent conveyance claim'; Cerberus told the reporters Steward was financially healthy when it exited. The presentation is not in the record, and no court has ruled on these characterizations. In July 2026 Cerberus settled, without a suit, creditor claims accusing it of structuring its 2020 exit, including a loan it later collected on; the settlement amount was redacted and Cerberus continued to deny any wrongdoing. ^{1 2 3 4 5 6 7}

analysisCerberus's convertible note was retired early. According to the debtors' complaint, on January 8, 2021 de la Torre caused Steward Health Care Investors LLC to enter into a promissory note with an entity related to Medical Properties Trust (MPT) whose proceeds paid off the Cerberus Note, after which the Cerberus funds had no remaining debt or equity investment in the company; no court has ruled on the complaint. The amount is reported differently: the debtors' first-day declaration says Steward Health Care Investors LLC borrowed $335 million from MPT, the complaint gives no amount, and a February 2024 lawmakers' letter citing press reports says $355 million. Cerberus said the note was voluntarily prepaid in 2021, four years early, at de la Torre's discretion, with proceeds from the note's obligors, affiliates of de la Torre and MPT, not from Steward. The January 2021 promissory note is not in the record. ^{2 6 1 4 5 3 8 9 10 7}

analysisCerberus says it had no part in the January 2021 dividend. Replying in its September 19, 2024 statement to Ralph de la Torre's public account, it said it 'had nothing to do with' the $111 million dividend paid to de la Torre, his management team and Medical Properties Trust (MPT) shortly after its exit; that its understanding was that de la Torre owned or controlled the majority of Steward's equity at the time; that the use of the dividend proceeds to pay down his personal obligation about one year after it was incurred reflected no benefit to Steward; and that it had no direct knowledge of Steward's management decisions after its 2020 exit. The debtors' complaint alleges that de la Torre had been negotiating the note transaction and the dividend with MPT and Cerberus for weeks before they were executed. Cerberus also said it had no knowledge of the $200 million loan that de la Torre says he guaranteed with personal assets in 2020 to maintain services and prevent Cerberus from implementing a bankruptcy strategy, and that it never suggested a bankruptcy; an October 2024 investigative report quoted a May 2020 presentation to MPT's board as saying that Cerberus had 'attempted to re-trade management by threatening to manipulate Steward into bankruptcy'. The loan documents and the presentation are not in the record. ^{2 3 1 11 7}

analysisCerberus Capital Management, L.P. was named as a defendant, alongside Steward Health Care System LLC, Steward Health Care Network, Inc., Steward Medical Group, Inc. and many Steward hospital companies, in a qui tam complaint under the False Claims Act (a suit brought by private individuals, the relators, on behalf of the government) filed on October 11, 2018 in the U.S. District Court for the District of Massachusetts on behalf of the United States and the Commonwealth of Massachusetts (United States of America v. Steward Health Care System LLC, No. 1:18-cv-12125). The relators are not named, and the complaint's allegations are not in the reviewed docket text. The case was resolved by settlement and dismissal on May 20, 2022. ¹

analysisOn February 15, 2024 Senators Elizabeth Warren and Edward J. Markey and nine Massachusetts members of the House of Representatives wrote to Cerberus, citing press reports, that it had invested $246 million in Caritas Christi in 2010, that the 2016 Medical Properties Trust (MPT) deal 'returned Cerberus's initial investment' while leaving it a controlling stake, and that its 'unusual exit' brought $800 million in profit; they asked for answers by February 28, 2024, including how much it retained from MPT's $1.25 billion investment and whether a dividend was paid after that deal. These are the letter's characterizations and questions, not findings. In their March 7, 2024 letter the senators wrote that Cerberus had refused to provide much of the information sought, telling them in a February 26, 2024 letter, which is not in the record, that the question was 'more appropriately addressed to Steward and MPT'. According to an October 2024 investigative report, Cerberus declined to tell Congress the amount it received from the 2016 deal, saying it 'does not disclose the names of investors or the specific returns earned on CCM funds by investors'. Cerberus later published its September 19, 2024 statement, saying the only distribution it received from Steward was the 2016 dividend paid via the MPT transaction, and referred to a letter it said it had provided voluntarily to the Senate Committee on Health, Education, Labor, and Pensions. ^{2 3 4 5}

analysisRalph de la Torre's website states that Cerberus 'monetized approximately $1.1 billion from Steward' in the last four years of its ownership, resulting in $800 million profit for its investors; an October 2024 investigative report said its own review confirmed the figure, made up of $719 million in debt-based dividends including a recapitalization, $335 million from the sale to Steward management and more than $77 million in other dividends. Cerberus called the claim 'false and inaccurate', saying no proceeds were exchanged at the 2020 management buyout and that the 2021 prepayment of its note came from the obligors, affiliates of de la Torre and Medical Properties Trust, not from Steward. The same investigative report, prepared with a newspaper, stated that Steward faced ongoing congressional and grand jury probes and that Cerberus and de la Torre had extracted more than $1.3 billion from the company; a spokesperson for de la Torre said media and 'certain politicians' were 'trying to fan flames with exaggerated numbers and factually inaccurate soundbites that do not tie to public or audited sources', and Cerberus, which says its only distribution from Steward was the 2016 dividend, continued under its 2026 settlement with Steward's unpaid creditors to deny any wrongdoing or unlawful conduct. No grand jury charge appears in the record, and a July 30, 2026 newspaper report stated that no criminal charges had been filed. ^{3 6 4 7}

analysisAt the instruction of the debtors' Investigation Sub-Committee, a law firm advising the debtors investigated potential claims against current and former board members, equity holders, officers and other insiders, including breach of fiduciary duty, unlawful distribution and fraudulent transfer; according to Alan J. Carr's declaration, it reviewed hundreds of thousands of the debtors' documents and thousands of documents from third parties including Cerberus Capital Management, L.P., Medical Properties Trust, Inc., KPMG LLP, PwC US Group LLP, Crowe LLP, Ernst & Young LLP and Deloitte LLP, and conducted fourteen interviews. In his June 27, 2025 declaration Carr stated that the sub-committee, after reviewing initial findings on October 7, 2024 and a final report dated December 13, 2024, determined that the debtors had valuable estate claims against certain individuals and entities, and that distributions to Cerberus and other non-released parties alone amounted to at least $1 billion; this is the debtors' own assessment, not a court finding. The claims were being transferred to the SHC Creditor Litigation Trust. Cerberus has stated that the only distribution it received from Steward was made in 2016 through the MPT transaction and that Steward was at all times solvent during its ownership. The debtors' July 15, 2025 adversary complaint was brought against former insiders and Tenet, and the trust settled its potential claims against Cerberus in July 2026 without filing suit. ^{1 2 3 4}

analysisAccording to the settlement motion of the SHC Creditor Litigation Trust as reported in July 2026, the trust accused Cerberus of collecting a dividend from Steward in 2016 while Steward was already insolvent, which it called a fraudulent transfer, and of structuring its 2020 exit, including a loan it later collected on; it also said Steward's officers breached their duties by approving dividends that benefited other Steward executives. The trust said that reaching back to the 2016 transfer required a legal theory no court of appeals had yet addressed, and that trial and appeal could take years. No complaint was filed and no court ruled on these allegations. Cerberus disputed them entirely; according to the motion it argued that the claims 'lacked any merit' and that it had defenses, including on timing grounds, that would block any recovery, and in its 2024 statement it had said that the 2016 distribution was its only one from Steward, that Steward was solvent throughout its ownership, and that its 2020 convertible note was an obligation of affiliates of Ralph de la Torre, his management team and Medical Properties Trust, not of the Steward hospitals' operating company. The claims were settled in mid-July 2026 for an undisclosed amount, with Cerberus released and continuing to deny any wrongdoing. ^{3 2 5}

analysisNews reports of July 29 and 30, 2026 stated that Cerberus and the SHC Creditor Litigation Trust signed their settlement in mid-July 2026 after negotiating under a tolling agreement and mediation before a retired federal judge; no lawsuit against Cerberus had been filed, although the trustee had prepared draft complaints in March and May 2026. The trust asked the court to keep the amount sealed, with any party seeking an unredacted copy needing the trustee's approval and a nondisclosure agreement, and sought emergency approval within seven days, saying delay would push back payments to creditors; Cerberus had five business days after approval to wire the payment into escrow pending finality. Judge Christopher Lopez approved the settlement, writing that it provided creditors with 'significant value' and was preferable to litigation that could take years, cost millions and have an uncertain outcome. The amount and the names of released Cerberus-linked persons were kept confidential, and the settlement permanently releases Cerberus from claims the trust could pursue in relation to Steward. The agreement states that Cerberus continues to deny any wrongdoing or unlawful conduct, and Cerberus did not respond to a newspaper's request for comment. The settlement agreement and the approval order are not in the record, and a settlement is not an admission of liability. ^{5 3}