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Steward Needs More Loans; FTX Customers Recover in Full
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Good day and welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Wednesday, May 8. In today's briefing, Steward Health Care's urgent funding needs and FTX's plan to repay its crypto customers in full—and then some.
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Rockledge Regional Medical Center, a Steward-operated hospital, in Rockledge, Fla.
PHOTO: TIM SHORTT/ FLORIDA TODAY/USA TODAY NETWORK
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Steward Health will need more loans to stay afloat in bankruptcy. Steward Health Care System will need to borrow more money to survive bankruptcy than hospital landlord Medical Properties Trust is willing to provide, Steward lawyer Ray Schrock said at the company’s debut court appearance after filing for chapter 11.
MPT has committed to providing $75 million in loans to Steward, but that won’t be enough to last the company over the months it needs to sell off its hospitals and other assets, Schrock said at a hearing Tuesday in the U.S. Bankruptcy Court in Houston.
MPT is willing to lend Steward an additional $225 million, but only if certain conditions are met including regulatory approval of the sale of Stewardship Health, a network of 3,200 primary care physicians, and if buyers are found for most hospitals by the end of June. Court papers show Steward lists $6.6 billion in future lease obligations outstanding to MPT, plus a number of loans that MPT extended.
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Context: The companies fueled each other’s growth in recent years. MPT financed Steward’s acquisition of hospitals by buying real estate and facilities and leasing them back to the operator. Steward grew to become the nation’s largest physician-owned hospital business and the largest tenant of Alabama-based MPT.
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PHOTO: DADO RUVIC/REUTERS
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FTX files plan to repay customers in full. The defunct crypto exchange will have more than enough to repay its customers fully, an outcome that seemed unthinkable when it collapsed into bankruptcy in 2022. FTX forecast that its assets' cash value will amount to at least $14.5 billion, more than the roughly $11 billion that customers had stored on the exchange. The company plans to pay interest to its nearly 10 million users, most of whom are expected to recover 118% of their account balances within 60 days after the bankruptcy plan takes effect. A small number of creditors could recover as much as 142% over time, FTX said.
The company crashed into bankruptcy with nearly $9 billion of customer funds missing. It filled that balance-sheet hole in bankruptcy by selling off investments made by FTX and its closely-related trading firm Alameda Research in crypto tokens and other ventures. Some of FTX's holdings, like the cryptocurrency Solana, have risen in value since the bankruptcy filing. Its stake in artificial-intelligence startup Anthropic fetched $884 million. The proposed customer payouts require court approval, which is likely months away. —Andrew Scurria
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The Boy Scouts of America said it currently has thousands of girls involved in its programs.
PHOTO: CHRISTOPHER MILLETTE/ASSOCIATED PRESS
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Boy Scouts of America is renaming itself to be more inclusive. The Boy Scouts of America is renaming itself Scouting America after years of turmoil in an effort to be more welcoming.
The youth group said the name change would take effect in February 2025. The Boy Scouts have for years been dogged by hundreds of sexual-abuse lawsuits, which intensified when states such as California and New York began allowing people to sue regardless of when the alleged abuse occurred.
The group filed for bankruptcy in 2020, halting the lawsuits, and emerged from chapter 11 last year with a plan to pay roughly $2.4 billion to resolve more than 82,000 individual claims of sexual abuse.
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