Who owned and controlled Steward before its 2024 bankruptcy

analysisIn the Chapter 11 petitions filed on May 6, 2024, the debtors' corporate ownership statement listed Steward Health Care Holdings LLC (Holdings) as owner of 100% of the equity of Steward Health Care System LLC, and two non-debtors, Steward Health Care Investors LLC (Investors) and MPT Sycamore Opco LLC, as owners of about 90.1% and 9.9% of Holdings; the debtors' first-day declaration describes MPT Sycamore Opco's 9.9% as a passive, non-voting interest. The same statement said Steward Health Care System LLC owned, directly or indirectly, 100% of the other debtors, except where non-debtors held 10% or more: Collom & Carney Clinic Association held about 11.62% of Brim Healthcare of Texas, LLC; Radiology Associates of Norwood, Inc. held 25% of Steward PET Imaging, LLC; and TRACO International Group S. de R.L. held 30.17% of Davis Hospital & Medical Center, LP, 12.36% of Odessa Regional Hospital, LP and 99.99% of TRACO Investment Management LLC. ^{1 2}

analysisThe stake of Steward Health Care Investors LLC (Investors) in Steward Health Care Holdings LLC (Holdings) was pledged to an affiliate of Medical Properties Trust (MPT). According to the debtors' first-day declaration, Holdings guaranteed a Secured Promissory Note dated February 3, 2022 (the Investor Note) made by Investors to Cayman TRS Holding, an MPT affiliate, with original principal of $363.3 million at 4.0%, maturing in February 2029; about $397.9 million was outstanding at the petition date. Investors pledged its approximately 90.1% interest in Holdings to the noteholder, which had agreed to forbear. ²

analysisWhen Medical Properties Trust (MPT) announced its $1.25 billion transactions with Steward on September 26, 2016 (Exhibit 99.1 to an SEC filing), it described Steward as 'owned by its management team' and Cerberus Capital Management and said it would invest $50 million in Steward alongside Cerberus and management. The debtors' July 15, 2025 complaint alleges that before May 2020 funds managed or advised by Cerberus held a substantial investment in the Class A-1 membership interests of Steward Health Care Investors LLC (Investors), the managing member of Steward Health Care Holdings LLC (Holdings), 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 Investors, giving the funds significant control over all three companies. Cerberus said on September 19, 2024 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, whose adversary proceeding had reached the discovery-scheduling stage by July 2026. ^{1 2 3 4}

analysisSteward Health Care System LLC's audited consolidated financial statements for 2020, published as Exhibit 99.1 to a Medical Properties Trust (MPT) SEC filing, record that the company issued 5.1424 preferred membership interests on October 3, 2016 for $50 million and 5.84539 on September 29, 2017 for $100 million. MPT Sycamore OPCO LLC held them, having bought them in connection with the 2016 MPT sale-leaseback (a sale of hospital real estate that the seller leases back) and the 2017 IASIS acquisition; they rank ahead of common interests on liquidation, are convertible but not redeemable, and carry dividends only when declared by the Management Board. At December 31, 2020 and 2019 all 100 authorized and outstanding common membership interests were held by Steward Health Care Holdings LLC (Holdings), and further common interests could be issued only by vote or written consent of members holding a majority of the membership interests. An undated ownership chart of unstated authorship, published by an investigative outlet, shows investment funds affiliated with Cerberus above Steward Health Care Investors LLC, Investors above Holdings, and Steward Health Care System LLC with 100 common membership interests held by Holdings and 10.98779 preferred membership interests held by MPT Sycamore Opco LLC, a total equal to the two issues in the audited statements. ^{5 6}

analysisSteward Health Care System LLC's audited 2020 statements also say certain Steward managers were awarded Class B Interests in Steward Health Care Investors LLC (Investors), then described as the holder of all outstanding membership interests of Steward Health Care Holdings LLC (Holdings); the interests typically vest over four years, subject to time- and performance-based requirements. The 2024 Chapter 11 ownership statement instead shows Investors with about 90.1% of Holdings and MPT Sycamore Opco LLC with about 9.9%. ^{5 7}

analysisThe master lease of October 3, 2016 between Medical Properties Trust (MPT) lessor entities and Steward lessee entities (Exhibit 10.33 to an MPT SEC filing) defines the 'LLC Agreement' as the Fifth Amended and Restated Limited Liability Company Agreement of Steward Health Care System LLC, dated as of the lease date. Its definition of a 'Change of Control Transaction' excluded transfers of equity in Steward Health Care System LLC or Steward Health Care Holdings LLC among existing holders, transfers of interests held directly or indirectly by Cerberus Capital Management to funds it controls, and transfers of interests held directly or indirectly by Ralph de la Torre to persons in which he owns 51% or more. The lease defines 'Affiliate' by control or ownership of 25% or more, but provides that neither Cerberus Capital Management, L.P. nor its affiliates (other than Steward Health Care System LLC and its subsidiaries) nor de la Torre is deemed an Affiliate of Steward Health Care System LLC or of any facility lessee. ⁸

analysisCerberus left Steward's ownership in May 2020. In its September 19, 2024 statement, the former owner's own account, Cerberus said 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; quoting Steward's 2020 statement, it said Cerberus's controlling interest was exchanged for a convertible note, the physician group would control 90 percent and MPT would keep its previous 10 percent stake, and the deal was conditioned on $400 million of fresh capital. The debtors' complaint alleges that de la Torre 'engineered' the exchange of the Cerberus funds' membership interests in Steward Health Care Investors LLC (Investors) for a $350 million convertible promissory note (the Cerberus Note), which closed on May 12, 2020 and removed Cerberus from ownership, and that Cerberus and its funds were concerned at the time about Steward's insolvency; the June 27, 2025 declaration of independent manager Alan J. Carr adds that the exchange was made without any independent valuation of Cerberus's stake. Cerberus said no proceeds were exchanged at the time of 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; a spokesperson for de la Torre told an investigative outlet in 2024 that the only benefit he received from the recapitalization was to ensure that the hospitals were not put into a bankruptcy process in the middle of the pandemic and had sufficient funds to continue operating. No court has ruled on the complaint, which was at the discovery-scheduling stage in July 2026. Separately, in mid-July 2026 Cerberus settled, without a lawsuit having been filed, creditor claims accusing it of structuring its 2020 exit, including a loan it later collected on; the bankruptcy court approved the settlement by July 30, 2026, the amount was redacted, and the agreement states that Cerberus continued to deny any wrongdoing or unlawful conduct. ^{1 2 3 4 5 6 7}

analysisAccording to the debtors, control of Steward Health Care Investors LLC (Investors) passed to an entity of Ralph de la Torre at the time of the May 2020 buyout. They allege that on May 11, 2020 the LLC agreement of Investors was amended and restated to give de la Torre 'total control' over it through RDLT-SHCI Manager LLC, its Manager, which he controlled and served as President, Secretary and Treasurer; the declaration of independent manager Alan J. Carr states that the January 2021 members' written consent for a distribution was signed by RDLT-SHCI Manager LLC as Manager of Investors and by de la Torre as its President, Secretary and Treasurer. No court has ruled on these allegations. An October 2024 investigative report based on leaked internal documents gave percentages: Cerberus agreed to sell its controlling share, listed as 86.3 percent, to de la Torre and his management team for $350 million via a promissory note; de la Torre owned 80.7 percent of Steward by December 2020, when the chief financial officer of Medical Properties Trust (MPT) discussed a planned dividend in internal emails; and in January 2021 his holding company became the 97.9 percent shareholder of Investors, of whose voting securities he was the 100 percent owner. These figures refer to different entities and dates and are not stated in any filing in the record. De la Torre's website states that 'voting shares do not equal financial distributions' and that since 2020 distributions from any equity value in Investors differ widely from the percentage ownership of voting shares. ^{2 6 3 7 8}

analysisThe former owner and the former CEO disagree about a 2020 loan. De la Torre's website says he guaranteed a $200 million loan with personal assets in 2020, that Steward used the proceeds to maintain services and prevent Cerberus from pursuing a bankruptcy strategy, and that auditors deemed most of the proceeds a capital contribution to Steward Health Care System LLC. Cerberus said on September 19, 2024 that it had no knowledge of the loan, that his statements suggest he and management affiliates borrowed to buy Steward's equity from Cerberus, secured by that stock, and that it never suggested a bankruptcy. An October 2024 investigative report quoted a May 2020 presentation to the board of Medical Properties Trust as saying that Cerberus had 'attempted to re-trade management by threatening to manipulate Steward into bankruptcy'. Neither the loan documents nor the presentation are in the record. ^{1 8 7}

analysisThe debtors' complaint describes two steps taken in January 2021. It alleges that on January 7, 2021 de la Torre caused an amendment to the Sixth Amended and Restated LLC Agreement of Steward Health Care System LLC allowing any action requiring Management Board approval, including distributions, to be approved instead by written consent of members holding a majority of the interests, which the debtors say let him bypass the board, and that Steward Health Care Holdings LLC approved it in bad faith; the declaration of independent manager Alan J. Carr describes the same amendment. On January 8, 2021, one day after the amendment took effect, de la Torre allegedly caused Steward Health Care Investors LLC (Investors) to enter into a promissory note with an entity related to Medical Properties Trust (MPT) whose proceeds paid off the Cerberus Note, freeing Investors from a covenant that had barred distributions; afterwards the Cerberus funds had no remaining debt or equity investment in the company. 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. De la Torre's website states that the dividend that followed 'was approved by the requisite shareholders at the time'. No court has ruled on these allegations. ^{1 2 3 4 5 6 7}

analysisAccounts of the January 2021 financing differ. The debtors' first-day declaration of May 6, 2024 states that Steward Health Care Investors LLC borrowed $335 million from Medical Properties Trust (MPT) in January 2021 to buy out the Cerberus note, while their 2025 complaint names that company as borrower without stating the amount. Senators Warren and Markey wrote on March 7, 2024 that the 2020 exit led to Steward borrowing another $335 million from MPT; a February 15, 2024 lawmakers' letter, citing press reports, said Steward borrowed $355 million from MPT to buy the note; an October 2024 investigative report said the note was retired with $335 million from MPT; and a July 2026 newspaper report said MPT lent the money to the new owners. Cerberus said the obligors, affiliates of de la Torre and MPT, prepaid it, not Steward. The January 2021 promissory note is not in the record. ^{8 7 9 10 11 5 1 4}

analysisThe debtors allege that when the Cerberus Note was repaid and a dividend paid in January 2021, de la Torre controlled Steward Health Care System LLC through a chain: Steward Health Care Holdings LLC (Holdings) held 100% of its common (over 90% of all) interests and appointed its board; Steward Health Care Investors LLC (Investors) held 100% of Holdings; RDLT-SHCI Manager LLC managed Investors; and he controlled RDLT-SHCI Manager. They also allege that he, Michael Callum and James Karam were controlling insider shareholders of Investors. No court has ruled on these allegations. Cerberus, which says it had no direct knowledge of Steward's management decisions after its 2020 exit, said on September 19, 2024 that its understanding was that de la Torre owned or controlled the majority of Steward's equity when the $111 million dividend was paid in 2021 and that Cerberus had nothing to do with that dividend; the complaint alleges that de la Torre had been negotiating the note transaction that cleared the way for the dividend, and the dividend itself, with Medical Properties Trust and Cerberus for weeks before they were executed. ^{1 4 5}

analysisSteward itself described the change of control in June 2021. In a joint release with Tenet Healthcare dated June 16, 2021 (Exhibit 99.1 to a Tenet SEC filing), Steward called its planned purchase of five Tenet hospitals in the Miami-Dade and Southern Broward area its first acquisition 'since finalizing full physician control and leadership of the organization in the summer of 2020', and described the company as founded by Ralph de la Torre. ¹²

analysisDe la Torre's own securities filing sets out the top of the chain. In a Schedule 13D on CareMax, Inc. shares filed with the SEC for an event on November 10, 2022, he reported that he is the sole member manager of Santa Clara Holdings LLC, which is the sole member manager of RDLT-SHCI Manager LLC and RDLT-SHCI Investor LLC; that RDLT-SHCI Manager is the sole manager of Steward Health Care Investors LLC, which is the member manager of Sparta Holding Co. LLC; and that in this capacity he could vote and dispose of securities held by these entities. CareMax, Inc.'s 2022 SEC filings on its purchase of Steward's value-based care business describe him as 'Chairman, Chief Executive Officer and controlling equityholder' of the Parent, Steward Health Care System LLC (proxy statement dated October 7, 2022), and as 'principal equityholder' of the Seller Parties, Sparta Holding Co. LLC and Steward Health Care System LLC (Form 8-K for November 10, 2022); the proxy's summary of the financial adviser's May 31, 2022 opinion calls Steward Health Care Investors, LLC and de la Torre significant shareholders of the Parent. ^{1 2 3}

analysisThe debtors allege that RDLT-SHCI Investor LLC, a Delaware company of which de la Torre is President, Secretary and Treasurer, owned interests in Steward Health Care Investors LLC (Investors), held CareMax Inc. shares on his behalf and was at all relevant times his alter ego, and that Steward Health Care International S.L., a Spanish company whose ultimate majority ownership was, on information and belief, held by de la Torre, owned an interest in Investors and received distributions into US bank accounts. Asked in 2024 by an investigative outlet about loans from the Madrid-based international company, a spokesperson for de la Torre said that in 2018 Steward Healthcare International was a subsidiary of Steward Healthcare System. No court has ruled on these allegations. A separate structure appears in a January 24, 2021 letter from a US law firm to Maltese lawyers, published by an investigative outlet: Santa Clara Holdings LLC owned 100% of the voting equity interests of Steward Health Care International Investors LLC, a different entity from Steward Health Care Investors LLC, and de la Torre owned 100% of the voting equity interests of Santa Clara. ^{4 5 6 7}