Steward CEO Won’t Testify in Senate Until Bankruptcy Ends
(Bloomberg) -- Steward Health Care Chief Executive Officer Ralph de La Torre has informed senators he won’t participate in an upcoming hearing probing the hospital operator’s failure until after its bankruptcy has concluded.
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Lawyers for de la Torre also said in a Wednesday letter to Bernie Sanders, a Vermont independent, that members of the Senate health committee he chairs are attempting to turn an upcoming Sept. 12 hearing “into a pseudo-criminal proceeding in which they use the time, not to gather facts, but to convict Dr. de la Torre in the eyes of public opinion.” The Senate committee in a bipartisan vote authorized the investigation and subpoena of de la Torre to testify.
Democratic lawmakers have blamed de la Torre for Steward’s bankruptcy and criticized his compensation as chief executive. Sanders has also criticized the executive for declining past invitations to testify before Congress. The subpoena is the first to be issued by the Senate Committee on Health, Education, Labor and Pensions since 1981.
“It is not within this Committee’s purview to make predeterminations of alleged criminal misconduct under the auspices of an examination into Steward’s bankruptcy proceedings,” de la Torre’s letter said.
Sanders said in a statement that the Senate committee “will not accept this postponement” and intends to move forward with its plan to compel de la Torre to testify about “the gross mismanagement of Steward Health Care.”
“Congress will hold Dr. de la Torre accountable for his greed and for the damage he has caused to hospitals and patients throughout America,” Sanders said.
Being forced to testify later this month could also jeopardize a recently announced settlement with Steward’s landlord Medical Properties Trust Inc. intended to keep most of its hospitals open, de la Torre’s lawyers said. A federal court order to keep negotiations private also prohibits de La Torre from discussing information that was exchanged in those settlement talks, according to the letter.
The CEO said Steward also prohibited him late last month from testifying about issues related to the bankruptcy. Those matters, including Steward’s debt obligations and financing transactions, have been delegated to an independent board committee, the letter said.
The letter said de la Torre needs to respect the ongoing settlement and restructuring process “by remaining silent regarding the reasons for Steward’s bankruptcy.”
The settlement with MPT, which must be approved by a bankruptcy judge, would resolve billions of dollars of lease obligations that would provide a path toward keeping most of its hospitals open. Steward, which filed Chapter 11 in May, is also seeking court approval on the sale of some of its hospitals which had been at risk of closing.
--With assistance from Sri Taylor.
(Updates to include Sanders statement beginning in fifth paragraph.)
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