In a recent report by The Wall Street Journal, it has been revealed that Steward Health Care System, the country's largest private, for-profit hospital chain, paid out a substantial $790 million dividend to its private equity owner before filing for bankruptcy several years later. The payout, made in 2016 to Cerberus Capital Management, sees $719 million going to the private equity firm while the remaining $71 million was paid to Steward's management team, led by CEO Dr. Ralph de la Torre.

According to the report, the dividend payout was derived from a leasing deal with Medical Properties Trust, an Alabama real estate firm. Despite recording a significant net loss of $300 million in the same year, Steward apparently had "sufficient capital and liquidity" to make the dividend payments, as stated by Cerberus spokesperson Michael Sitrick.

Cerberus, which acquired Steward in 2010, did not receive any additional dividends from the hospital chain during its ownership years, further stated the Journal. However, in April 2020, Cerberus conducted an analysis and found that Steward would require a staggering $750 million over the next seven years to execute its business strategy. Unfortunately, Steward suffered a net loss of $408 million during the COVID-19 pandemic, exacerbating its financial woes.

Just a month later, Cerberus sold the struggling hospital chain to a group of physicians led by CEO Dr. Ralph de la Torre. The troubles continued for Steward as, this past May, the Boston-based company filed for bankruptcy protection, aiming to sell all of its hospitals to address its massive $9 billion debt.

Reports also suggest that Steward regularly failed to pay its vendors and lacked adequate staffing and equipment across many of its facilities. In addition, CEO Dr. Ralph de la Torre allegedly lived a life of luxury, indulging in corporate jet flights to exotic destinations and residing in a multi-million-dollar apartment, all at the expense of the struggling hospital chain.

Moreover, de la Torre's financial dealings and accounting practices have come under scrutiny by a federal grand jury based in Boston, according to The Boston Globe. Allegations have been made that de la Torre maneuvered for Steward to enter contracts with companies in which he had a personal ownership stake. Furthermore, a whistleblower claimed that de la Torre and other Steward executives boasted about their ability to illegally secure hospital contracts by providing bribes to government officials in Malta.

De la Torre has resisted appearing before a bipartisan group of senators to answer questions about the collapse of Steward, and has requested to postpone testifying on Capital Hill in response to a subpoena that requires his presence on September 12. A spokesperson for de la Torre has called the allegations "preposterous" and maintained that the company acted "lawfully and transparently" during its operations in Malta.

With these grave allegations and ongoing investigations, Steward Health Care System's future remains uncertain. The bankruptcy filing and the mismanagement accusations have cast a shadow of doubt over the once-prominent hospital chain's reputation, leaving many questioning the accountability and leadership within the organization.