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Hospital Bankruptcies Leave Communities Holding the Bag
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Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Wednesday, July 30. In today's briefing, the bankruptcies of Steward Health and Prospect Medical have left communities scrambling to cover care and budget shortfalls, with local governments and nonprofits spending tens of millions and some areas raising property taxes to offset unpaid obligations.
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An ambulance was stationed at the emergency-room entrance of the Crozer-Chester Medical Center after it shut down in May, ready to take patients who walk up to the hospital to another location.
Soma Biswas/WSJ
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Hospital Failures Following Private-Equity Payouts Leave Patients, Taxpayers in Lurch
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The recent collapses of Steward Health Care System and Prospect Medical Holdings, the two biggest hospital bankruptcies in decades, are forcing communities to pay up to fill gaps in patient care and budgets left by the failed chains.
State and local governments and community nonprofits have poured in tens of millions of dollars to bail out the bankrupt companies’ hospitals, according to public officials and court records. Steward and Prospect are also delinquent on property taxes and other levies, forcing some communities to hike property taxes.
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3-D Printer Maker Desktop Metal Risks Liquidation Without Sale of Assets
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Desktop Metal, a 3-D printing products maker, has filed for bankruptcy with plans to sell its assets in a private deal after defaulting on debt and failing to pay professional fees.
The company sought protection from creditors Monday in the U.S. Bankruptcy Court in Houston, seeking immediate court approval to sell certain assets in a $10 million private sale to Anzu Partners, an investment firm focused on industrial and life-sciences technology businesses.
The company said it would have to liquidate its business without the sale, putting roughly 780 jobs at risk.
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Silvergate Capital Defeats NYDIG’s $88.7 Million Bankruptcy Claim
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A Delaware judge on Tuesday rejected an $88.7 million claim against bankrupt Silvergate Capital filed by NYDIG, a bitcoin trading firm, bringing the former crypto bank one step closer to completing its chapter 11 winddown.
NYDIG argued that Silvergate breached the agreement to sell its $205 million loan it issued in 2022 to MacroStrategy to NYDIG at 75% of its face value 18 months before its bankruptcy filing in September 2024.
NYDIG said the agreement was binding, while Silvergate said it was not.
Judge Karen Owens of the U.S. Bankruptcy Court in Wilmington, Del., said in her bench ruling that the evidence overwhelmingly supports Silvergate’s argument that “there was no binding agreement reached” between Silvergate and NYDIG to buy and sell the loan.
Silvergate Capital filed for chapter 11 in 2024 to carry out its winddown plan after having shuttered its banking unit, Silvergate Bank, in March 2023.
NYDIG filed the claim against Silvergate, alleging that Silvergate used the proposed deal with NYDIG as a “stalking horse” to strike a better deal with MacroStrategy, a subsidiary of MicroStrategy now known as Strategy. A few days after the term sheet was signed, MacroStrategy repaid the debt to Silvergate at 78% of its face value.
—Akiko Matsuda
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Private-Equity Firms Haven’t Cracked the 401(k) Fee Riddle, Experts Say
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The private-equity industry’s fee model has for decades been the envy of Wall Street. Entering defined-contribution retirement accounts could force it to change. Right now the private-equity industry, which typically manages money for large institutions and the rich, has a golden opportunity to break into the $12.2 trillion U.S. defined-contribution industry.
But the industry has another crucial problem to solve: how to fit high-cost private-equity funds into the low-margin business of managing retirement accounts.
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WeWork Wants You to Know It’s a Grown-Up Real-Estate Firm Now
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Lucey spearheaded a new international advertising campaign called ‘WeWork for Business.’ Photo: Olga Ginzburg for WSJ
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A new video for the workspace company WeWork delivers shot after shot of city skylines, gleaming glass buildings and meeting rooms filled with besuited, efficient-looking workers.
“WeWork is the platform that maximizes the efficiency of your real-estate strategy,” a voice-over says. There isn’t a beer tap in sight.
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In short, it looks like an ad designed to advertise an office-rental firm. And that’s the point, according to WeWork’s new chief marketing and communications officer, Petula Lucey, who spearheaded the video as part of a new international advertising campaign called “WeWork for Business.”
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Procter & Gamble Says Consumers Are Under Stress
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Procter & Gamble, long a bellwether for the health of the U.S. consumer economy, says American shoppers are slowing down.
Consumers are using up their pantry inventory, delaying purchases and shopping at stores less frequently to avoid the temptation to buy things they don’t immediately need, said P&G’s chief financial officer, Andre Schulten. The company reported quarterly earnings Tuesday.
The maker of Tide detergent, Charmin toilet paper and Pantene shampoo has seen signs of slower spending across its product categories in recent weeks, he said.
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“The company faces more challenges now than any time I can remember."
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— Chief Executive Jon Moeller at P&G
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P&G announced that Moeller would step aside and become executive chairman in January. Moeller, who took the job in 2021, is being succeeded by Chief Operating Officer Shailesh Jejurikar, who joined the company in 1989.
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Earlier: P&G announced back in June that it would reduce its non-manufacturing workforce by 15%, or 7,000 roles.
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