Steward Health Care, owner of Trumbull Regional Medical Center in Warren, has filed for Chapter 11 bankruptcy, the Texas-based for-profit company announced Monday.
The company's hospitals and physician offices, including Trumbull Regional and Hillside Rehabilitation Hospital, will remain open and operating, according to a news release.
"The Company is finalizing the terms of debtor-in-possession financing from Medical Properties Trust for initial funding of $75 million and up to an additional $225 million upon the satisfaction of certain conditions acceptable to Medical Properties Trust," the news release said.
J.B. Silvers, a finance professor at Case Western Reserve University, said the future of the Warren-area hospitals is tied to their profitability. If they are generating revenue, Steward may continue to run them, or sell them off for cash, if needed.
"If the hospital is sound and still doing patient care and has loyal staff and patients that see that as their hospital, there is no reason [Trumbull Regional] should be in trouble," he said.
Warren and Trumbull County leaders previously expressed concern for the future of Trumbull Regional amid Steward Health Care's financial woes. The company is reportedly in millions of dollars of debt.
"With the additional financing in this process, we are confident that we will keep hospitals open, supplied, and operating so that our care of our patients and our employees is maintained," the news release said.
Warren Mayor Doug Franklin and Trumbull County Commissioners sent a letter to residents in March, noting that they are preparing for all possible scenarios if Steward Health Care decides to shutter its local hospitals. At that time, Trumbull Regional hospital leaders said finances were stable enough to remain open for at least the next six months.
In February, Steward Health Care released details of its plans to recover from its financial debt, which included hiring an outside firm to restructure the health system, negotiating new employment agreements and selling non-essential assets. The company sold its Ohio lab operations to Quest that month.
If Trumbull Regional were to close, more than 700 jobs and up to about $1.5 million in yearly tax revenue could potentially be lost.
The hospital has been plagued by staffing shortages and has dodged closure rumors after Steward Health Care closed Northside Regional Medical Center in Youngstown shortly after acquiring the Ohio hospitals in 2018. Hospital leadership laid off 288 employees, citing steady declines in patient volume.
Trumbull County Commissioner Denny Malloy previously said he is determined to keep the hospital open, even if another company were to take ownership.
