This Hospital Closed. The CEO Has A $40 Million Yacht.

TL;DR

Private equity firm Cerberus extracted $700M+ from struggling hospitals through a real estate scheme, leaving communities without emergency care while executives kept the profits.

Key Points

• 1.The scheme: Cerberus partnered with heart surgeon Ralph de la Torre to buy struggling Massachusetts hospital chain Steward Healthcare, then sold the land under the hospitals to Medical Properties Trust (MPT) and leased it back — pocketing the cash while the hospitals still owed rent.
• 2.The extraction: Cerberus investors received over $700 million in dividends from the deal. Ralph de la Torre used his share to purchase a ~$40 million, 180-foot yacht now tracked near Fort Lauderdale.
• 3.The collapse: Steward Healthcare filed Chapter 11 bankruptcy in May 2024. At least two hospitals closed outright, including Nashoba Valley Medical Center — which had served 16 Massachusetts towns with 16,000 ER visits per year.
• 4.Real human cost: Ambulance travel times jumped from 5 minutes to 45 minutes. Staff reported repossessed equipment, cancelled surgeries, and routine supply shortages. Community members say at least one patient died due to a transfer that would have been unnecessary before the closure.
• 5.MPT's ongoing role: Medical Properties Trust currently holds land under 388 hospitals. A Harvard study found hospitals owned by real estate investment trusts are significantly more likely to close or go bankrupt. MPT's CEO made $16M in 2024 and ~$70M in total recent compensation.
• 6.Why it's legal: Sale-leasebacks and private equity buyouts are standard financial tools — not inherently illegal. De la Torre was held in contempt of Congress but faces no criminal charges.
• 7.Historical context: Hospital privatization traces back to 1968 when KFC financier Jack Massie co-founded HCA, proving hospitals could be run like franchises. HCA was later bought by private equity for $33B and resold publicly — investors made a 200%+ return in five years.