Latest news with #RalphdelaTorre
Daily Mail
4 days ago
- Business
- Daily Mail
Hospital chain sues CEO blaming him for bankruptcy
Steward Health Care is suing its 'greedy' former CEO, claiming he pilfered millions from the hospital chain as it went bankrupt. In new filings the hospital chain claims its founder and former chief executive Ralph de la Torre (pictured) devised a scheme to plunder the company of hundreds of millions of dollars that directly led to its collapse. The hospital chain alleges that de la Torre and his team of executives defrauded the company of $262 million and wasted a further $1.1 billion on buying up overpriced hospitals in Florida. The complaint alleges that the catastrophic investments were made to fulfil de la Torre's 'personal desire to build a hospital empire,' a reckless move that involved overpaying about $200 million for the properties. Steward, which is now being run by an independent administrator after filing for bankruptcy in 2024, is attempting to claw back some of the money from its former bosses to help pay off its debts. De la Torre has become the poster boy for corporate greed rot at the center of the struggling healthcare system. 'Through their greed and bad faith misconduct, [these former insiders] operated Steward with the aim of enriching themselves at the expense of the Company, its creditors, and the patients and communities that Steward served,' the complaint states. 'These insiders pilfered Steward's assets for their own material gain, while leaving the Company and its hospitals perpetually undercapitalized and insolvent.' The most recent filings also claim that de la Torre and other executives paid themselves a $111 million dividend in 2021, despite knowing that Steward was in trouble as early as 2016. De la Torre founded Steward in Boston in 2010, growing it into the country's largest private for-profit hospital chain, the Boston Globe reported. It rapidly bought up hospitals on a trajectory that became unsustainable, plunging it into dire financial straits. It eventually filed for bankruptcy in May last year while operating 30 hospitals across eight states. As it moves through the bankruptcy process Steward has closed two hospitals in Massachusetts - Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer - and sold off a further six. Filings later revealed by The Wall Street Journal showed that after de la Torre took over majority ownership of the hospital chain in 2020, he received personal payments of at least $250 million over the next four years. He went on to use the money to purchase a $7.2million 500-acre ranch in Waxahachie, Texas, and a 190-foot, $40 million yacht. Further to this de la Torre was revealed to own a 11,108-square-foot mansion in Dallas, valued at more than $7 million.
Daily Mail
4 days ago
- Business
- Daily Mail
Bankrupt hospital chain sues CEO over collapse that left thousands without access to emergency rooms
Steward Health Care is suing its 'greedy' former CEO, claiming he pilfered millions from the hospital chain as it went bankrupt. In new filings the hospital chain claims its founder and former chief executive Ralph de la Torre devised a scheme to plunder the company of hundreds of millions of dollars that directly led to its collapse. The hospital chain alleges that de la Torre and his team of executives defrauded the company of $262 million and wasted a further $1.1 billion on buying up overpriced hospitals in Florida. The complaint alleges that the catastrophic investments were made to fulfil de la Torre's 'personal desire to build a hospital empire,' a reckless move that involved overpaying about $200 million for the properties. Steward, which is now being run by an independent administrator after filing for bankruptcy in 2024, is attempting to claw back some of the money from its former bosses to help pay off its debts. De la Torre has become the poster boy for corporate greed rot at the center of the struggling healthcare system. 'Through their greed and bad faith misconduct, [these former insiders] operated Steward with the aim of enriching themselves at the expense of the Company, its creditors, and the patients and communities that Steward served,' the complaint states. 'These insiders pilfered Steward's assets for their own material gain, while leaving the Company and its hospitals perpetually undercapitalized and insolvent.' The most recent filings also claim that de la Torre and other executives paid themselves a $111 million dividend in 2021, despite knowing that Steward was in trouble as early as 2016. De la Torre founded Steward in Boston in 2010, growing it into the country's largest private for-profit hospital chain, the Boston Globe reported. It rapidly bought up hospitals on a trajectory that became unsustainable, plunging it into dire financial straits. It eventually filed for bankruptcy in May last year while operating 30 hospitals across eight states. As it moves through the bankruptcy process Steward has closed two hospitals in Massachusetts - Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer - and sold off a further six. Filings later revealed by The Wall Street Journal showed that after de la Torre took over majority ownership of the hospital chain in 2020, he received personal payments of at least $250 million over the next four years. He went on to use the money to purchase a $7.2million 500-acre ranch in Waxahachie, Texas, and a 190-foot, $40 million yacht. Further to this de la Torre was revealed to own a 11,108-square-foot mansion in Dallas, valued at more than $7 million. Protests against the hospital closures occurred last summer 'He basically stole millions out of Steward on the backs of workers and patients and bought himself fancy yachts, mansions and now apparently lavish trips to Versailles,' Massachusetts Gov. Maura Healey said at the time of the bankruptcy announcement, referring to how the hospital owner was spotted in France watching Olympic equestrian events at Versailles. 'I hope he gets his just due and that federal investigators will come after him for his actions,' she said in a statement. 'I am disgusted by Ralph de la Torre,' she concluded.
Yahoo
6 days ago
- Business
- Yahoo
Bankrupt Steward sues former CEO over alleged financial mismanagement
This story was originally published on Healthcare Dive. To receive daily news and insights, subscribe to our free daily Healthcare Dive newsletter. Dive Brief: Bankrupt Steward Health Care is suing its former CEO Ralph de la Torre, alleging he and other former health system leaders 'pilfered' the company's assets and led to its financial decline. In a lawsuit filed Tuesday in Bankruptcy Court for the Southern District of Texas, the provider argued de la Torre and some former board members 'operated Steward with the aim of enriching themselves at the expense of the Company, its creditors, and the patients and communities that Steward served.' The health system, which filed for bankruptcy last year, seeks to recoup nearly $1.4 billion from de la Torre and the other defendants. Dive Insight: Steward's bankruptcy is one of the largest provider restructurings in decades. The filing sent the Dallas-based health system on a monthslong push to sell off dozens of hospitals and other assets, leaving some facilities to shut their doors after failing to find buyers. 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. The bankruptcy also sparked the ire of lawmakers, who raised concerns about access to care in communities served by Steward as well as the health system's financial practices in the run-up to its collapse. De la Torre was called before the Senate last year to testify about Steward's bankruptcy, but he failed to appear and was held in contempt for ignoring a congressional subpoena. De la Torre eventually resigned from his position as Steward CEO and chairman of the health system's board last fall. 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't be reached for comment by Healthcare Dive by press time. In a comment to Bloomberg Law Wednesday, a spokesperson for de la Torre said he 'disputes the allegations of wrongdoing.' 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 'insolvent,' according to the lawsuit. The case also argues a 2021 purchase of five Miami-area hospitals and their associated physician practices from Tenet Healthcare — a for-profit health system also named in the suit — cost Steward $1.1 billion, above the facilities' value at $895 million. Steward alleged the high price was 'based on de la Torre's personal desire to build a hospital empire in the Miami area, rather than on any independent financial analysis.' Tenet did not respond to a request for comment by press time. 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's proceeds back to a separate entity controlled by the defendants. Late last year, CareMax also filed for bankruptcy, saying it was dragged down by Steward's collapse, given it served as the exclusive value-based managed service organization across Steward's network. Recommended Reading Senate votes unanimously to hold Steward Health Care CEO in criminal contempt Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CBS News
7 days ago
- Business
- CBS News
Steward Health Care claims former executives' "greed and bad faith misconduct" led to hospitals chain's bankruptcy
Steward Health Care, an embattled hospital chain that has been the focus of federal scrutiny, has filed new court papers blaming the company's financial woes on its founding chief executive. The company alleges that the ex-CEO and three former colleagues misappropriated hundreds of millions of dollars and drove the chain into bankruptcy. Steward accuses its founder Ralph de la Torre and three others — Michael Callum, James Karam, and Sanjay Shetty — of defrauding the company of more than $245 million. "Through their greed and bad faith misconduct, [these former insiders] operated Steward with the aim of enriching themselves at the expense of the Company, its creditors, and the patients and communities that Steward served," the new filing alleges. "These insiders pilfered Steward's assets for their own material gain, while leaving the Company and its hospitals perpetually undercapitalized and insolvent." Once the nation's largest for-profit hospital chain, Steward operated hospitals in Massachusetts, Texas, Florida, Pennsylvania and other states. CBS News found that de la Torre pushed for the company's expansion. By working with a real estate investment firm, Medical Properties Trust, de la Torre helped purchase new medical properties, sell off the real estate, and force the hospitals into costly lease-back arrangements. A CBS News investigation that spanned nearly two years documented allegations of how private equity investors and de la Torre followed this formula, extracting hundreds of millions of dollars in dividends from the real estate sales, while health care workers and patients struggled to get the life-saving supplies they needed as a result. Records reviewed by CBS News showed Steward hospitals around the country left a trail of unpaid bills, at times risking a shortage of potentially life-saving supplies. That included a case in a Massachusetts hospital where medical staff says a device that could have stopped the bleeding in a new mother's liver was repossessed by the manufacturer weeks earlier. After being transferred to another hospital, the young woman died just hours after giving birth to her first daughter. Last August, after filing for bankruptcy, the company sold off six Massachusetts hospitals. The sale of the final two facilities in the state left about 1,200 workers jobless, according to state officials. In a 2024 interview with CBS News, Massachusetts Gov. Maura Healey did not hold back in her assessment of the conduct of Steward executives. "I'm disgusted. It's selfish. It's greed," she said. At the time of the patient's death, a spokesperson for Steward told CBS News company executives always put patients first and said they "deny that any other considerations were placed ahead of that guiding principle." In an earlier statement, the spokesperson said Steward "has actively and meaningfully invested" in its hospital system since its formation, including in Massachusetts, where it took over hospitals that were "failing" and "about to close." De la Torre also defended the company's actions. "Steward Health Care has done everything in its power to operate successfully in a highly challenging health care environment," de la Torre said in a company statement in 2024. This week's complaint lists three major transactions that de la Torre and executives allegedly profited from while leaving Steward hospitals struggling for funds to operate. In January 2021, de la Torre allegedly took a $111 million dividend payout while the company was struggling financially. The former CEO also pocketed $81.5 million according to the complaint. The court filing also lists the former executives who benefited: Callum, who as vice president for physician services at Steward received $10.3 million. Shetty, then-president of Steward Health Care System received $1.8 million and Karam, who remains a member of Steward's board, received $728,456. The complaint also claims Steward Health Care International, the international arm of Steward that's majority-owned by de la Torre, received $4.3 million of the dividend payout. Later that year, Steward claims de la Torre overpaid by $200 million for five Miami-based hospitals acquired from Tenet Healthcare Corporation. The complaint alleges the former CEO pushed for the $1.1 billion deal based on his "personal desire to build a hospital empire in the Miami area, rather than on any independent financial analysis." According to the complaint, de la Torre then sold assets related to Steward's Medicare Advantage business to a company called CareMax in 2022. Steward, through its physicians organization, allegedly received $60.5 million in cash, while the bulk of the proceeds — almost $134 million in stock of CareMax — ultimately went to a holding company that was majority-owned by de la Torre, Callum, Shetty and Karam. The complaint alleges de la Torre and named board members "sold valuable" assets and "diverted the proceeds to themselves" while the company went insolvent. "De la Torre, Callum, and Karam were grossly negligent and breached their duties of care, loyalty, and good faith," according to the filing. CareMax filed for bankruptcy in February. While Steward's hospitals were struggling, CBS News previously reported on de la Torre's lavish personal spending, including the purchase of a $30 million yacht in 2021, a multimillion-dollar Texas horse ranch in 2022, and two corporate jets valued at $95 million. Steward Health Care is now being run by a court-appointed administrator and is trying to claw back funds from its former leaders to pay off its creditors. De la Torre, who founded the company in 2010, is at the center of a federal probe focused on potential fraud, embezzlement and violations of the Foreign Corrupt Practices Act, sources told CBS News. In 2024, he refused to appear before the Senate Health, Education, Labor and Pensions Committee that had been looking into Steward's bankruptcy, despite being issued a subpoena. Senators took the rare step of holding him in contempt for that failure to appear. In a statement, a spokesperson for de la Torre says the former CEO "disputes the allegations of wrongdoing and will vigorously defend himself against them."
Miami Herald
17-07-2025
- Business
- Miami Herald
Bankrupt hospital chain sues CEO over ‘billions' as it liquidates
When a company goes bankrupt, its workers suffer, its customers suffer, and certainly its unpaid vendors and creditors suffer. In theory, top executives should be the captain going down with the ship, and while they may already be very wealthy, they should suffer as their company collapses. It's hard to compare blue-collar people losing their jobs - and even upper-middle-class white-collar workers being laid off - to millionaires, who might have to cut back on private jets. But when there's a bankruptcy, the suffering should be spread out. Related: Social Security's 2026 COLA on track to break a 29-year trend For patients and employees of Steward Health Care, there has been plenty of suffering since the hospital chain filed for Chapter 11 bankruptcy in May 2024. The chain owned 31 hospitals across eight states at the time of its bankruptcy. Many of its hospitals were in bad shape when the decision was made to liquidate the company, and it was not able to find buyers for every location. Don't miss the move: Subscribe to TheStreet's free daily newsletter Six of the company's hospitals have closed for good, while a seventh was closed for nearly two months before a late buyer stepped in. Another facility, which did find a buyer, is also slated to close due to years of neglect at the facility. Many of the remaining locations have new owners, but the condition of the facilities may not be great, according to a new lawsuit. When it filed for Chapter 11 bankruptcy protection last year, Steward placed the blame in a number of places. First, it blamed a slow financial transaction that would have actually just been a Band-Aid, not a solution to its issues. The company also put some blame on the United States government. "The other primary factor driving this voluntary Chapter 11 case is, in large part, due to Steward continuing to face challenges created by insufficient reimbursement by government payors as a result of decreasing reimbursement rates while at the same time facing skyrocketing labor costs, increased material and operational costs due to inflation, and the continued impacts of the Covid-19 pandemic," the company shared. More bankruptcy Major iconic food brand files for Chapter 11 bankruptcyPopular Dairy Queen rival franchisee files Chapter 11 bankruptcyPopular vision care chain files for Chapter 11 bankruptcy At the time, it did not mention any malfeasance by its former executive team. That tune has changed with a new lawsuit it's bringing against its former CEO, Ralph de le Torre. "Dallas-based Steward Health Care filed a lawsuit July 15 in bankruptcy court against its former chairman and CEO, Ralph de la Torre, MD, and other top system executives, claiming they conducted insider transactions that drained Steward's assets and contributed to financial collapse," Becker's Hospital Review reported. The 68-page lawsuit contains claims of self-dealing, breach of fiduciary duty and fraudulent transfers. It named former Steward leaders, including Dr. de la Torre, former Steward Executive Vice President for Physician Services Michael Callum, First Bristol Corp. Co-CEO James Karam, and former Steward President Sanjay Shetty, MD. "The lawsuit pointed to an $111 million dividend in January 2021, while Steward was allegedly insolvent, that was allegedly received by Steward board members including Dr. de la Torre, Mr. Callum and Mr. Karam. Dr. de la Torre received $81.5 million of the dividend and used $30 million of it to purchase a 'superyacht,'" the lawsuit said. Steward, after it filed for Chapter 11 bankruptcy, has routinely been accused of poor maintenance and bad working conditions at its hospitals. The lawsuit alleges some of the company's money was diverted to its executive team improperly. Dallas-based Tenet Healthcare was also listed as a defendant in the lawsuit regarding Steward's purchase of five Tenet hospitals in Florida for around $1.1 billion in August 2022. "The lawsuit claimed Tenet's facilities were initially valued at $895 million by Steward, but a higher price was paid due to Dr. de la Torre's 'personal desire to build a hospital empire in the Miami area, rather than on any independent financial analysis,'" according to documents. There are some other very significant claims in the lawsuit: Steward claimed Tenet received a fraudulent transfer in connection with the deal, which included almost $209 million in cash that Steward contributed. It argued that Steward did not receive reasonably equivalent value for the payment and was left with an "unreasonably small capital in relation to its business both before and after making such payment."Steward also claimed that the proceeds of its 2022 value-based care assets sale to CareMax were diverted, with only $60.5 million of the $194 million sale going to the system. It alleged that the remainder went to entities run by Dr. de la Torre and other insiders. "Dr. de la Torre disputes the allegations of wrongdoing and will vigorously defend himself against them," a spokesperson for Dr. de la Torre said in a July 16 statement shared with Becker's. Related: Vital diabetes care health care brand files Chapter 11 bankruptcy The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
