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This audio is auto-generated. Please let us know if you have feedback<\/a>.<\/p>\n Dive Brief:<\/p>\n Bankrupt Steward Health Care is suing its former CEO Ralph de la Torre<\/a>, alleging he and other former health system leaders \u201cpilfered\u201d the company\u2019s assets and led to its financial decline.\u00a0 Dive Insight:\u00a0<\/p>\n Steward\u2019s bankruptcy is one of the largest provider restructurings in decades.\u00a0<\/p>\n The filing sent the Dallas-based health system on a monthslong push to sell off dozens of hospitals<\/a> and other assets, leaving some facilities to shut their doors<\/a> after failing to find buyers.\u00a0<\/p>\n Thousands of jobs were lost after five Steward hospitals shut down, and the closures strained local healthcare systems, according to a report published this spring by the Private Equity Stakeholder Project.<\/p>\n The bankruptcy also sparked the ire of lawmakers<\/a>, who raised concerns about access to care in communities served by Steward as well as the health system\u2019s financial practices<\/a> in the run-up to its collapse.\u00a0<\/p>\n De la Torre was called before the Senate<\/a> last year to testify about Steward\u2019s bankruptcy, but he failed to appear and was held in contempt<\/a>\u00a0for ignoring a congressional subpoena. De la Torre eventually resigned from his position as Steward CEO and chairman of the health system\u2019s board<\/a> last fall.<\/p>\n Now, he and other former Steward officers are facing a lawsuit from the system, alleging they mismanaged the health system to boost their own finances. De la Torre couldn\u2019t be reached for comment by Healthcare Dive by press time.\u00a0In a comment to Bloomberg Law Wednesday,<\/a> a spokesperson for de la Torre said he \u201cdisputes the allegations of wrongdoing.\u201d<\/p>\n The case centers around three transactions executed from April 2020 through November 2022. In one deal, de la Torre allegedly orchestrated a $111 million dividend paid out to some of the defendants, even at a time when the health system was \u201cinsolvent,\u201d according to the lawsuit.\u00a0<\/p>\n The case also argues a 2021 purchase of five Miami-area hospitals and their associated physician practices from Tenet Healthcare \u2014 a for-profit health system also named in the suit \u2014 cost Steward $1.1 billion, above the facilities\u2019 value at $895 million.<\/p>\n Steward alleged the high price was \u201cbased on de la Torre\u2019s personal desire to build a hospital empire in the Miami area, rather than on any independent financial analysis.\u201d Tenet did not respond to a request for comment by press time.\u00a0<\/p>\n Additionally, Steward claimed a third deal negotiated by de la Torre, where the health system sold its value-based care assets to medical center operator CareMax, ended up funneling the sale\u2019s proceeds back to a separate entity controlled by the defendants.\u00a0<\/p>\n
\nIn a lawsuit filed Tuesday in Bankruptcy Court for the Southern District of Texas, the provider argued de la Torre and some former board members \u201coperated Steward with the aim of enriching themselves at the expense of the Company, its creditors, and the patients and communities that Steward served.\u201d\u00a0
\nThe health system, which filed for bankruptcy last year<\/a>, seeks to recoup nearly $1.4 billion from de la Torre and the other defendants.\u00a0<\/p>\n