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Judge approves sale of hospitals

WARREN — A U.S. bankruptcy court judge in Houston has approved the sale of Trumbull Regional Medical Center and Hillside Rehabilitation Hospital to an out-of-state, multistate hospital operator.

Judge Christopher M. Lopez signed the order late Wednesday afternoon that authorizes the transaction between bankrupt Steward Health Care and Flint, Michigan-based Insight Health System “free and clear” of any liens, claims, encumbrances and interests.

His approval comes two days after Steward Health filed papers with the court stating an objection to the transaction had been resolved.

Medical equipment company Becton, Dickinson & Company of New Jersey and its affiliate, CareFusion Solutions, protested the sale over an automated medicine dispensing system Steward Health uses at the facilities and others under a lease between the two companies.

The dispute resolution paved the way for the final sale order. The transaction also includes sites affiliated with the hospitals in Trumbull and Mahoning counties.

Getting to Wednesday’s approval was a winding road.

Steward Health filed for Chapter 11 bankruptcy protection May 6, citing billions in debt. Within days, the Dallas-based company announced plans to sell its more than 30 hospitals. Then in August — after canceling an auction for the local hospitals after reporting to the court it had not received qualified bids for the facilities the month prior — Steward Health announced it planned to close the hospitals in Warren and Howland as well as the satellite facilities Sept. 20.

That decision, however, was paused with announcement Aug. 31 of settlement talks and broad outlines of a global settlement agreement in Steward Health’s case.

Lopez approved an interim plan Sept. 11 that transferred control of Trumbull Regional, Hillside and 13 other Steward Health facilities to its landlord, Medical Properties Trust, based in Alabama, using interim managers.

At the time, Insight Health was named interim operator for the local sites.

The final settlement was approved by Lopez on Sept. 18.

Meanwhile, a group of local organizations, business and elected officials, and medical professionals were working to save the facilities from closure by raising funds to keep it open, and a member of the coalition, Western Reserve Health Education Inc., a nonprofit that provides medical residency training at the hospitals, submitted a proposal to the court.

When Insight Health was named interim operator Sept. 11, the group threw their support behind the transition to Insight Health.

Operating Trumbull Regional and Hillside are not-for-profit organizations affiliated with Insight Health — Insight Foundation of Trumbull and Insight Foundation of Hillside, the same not-for-profit organizations that were named interim managers in September.

The company is a physician-led organization that operates hospitals and other health care facilities in Michigan, Iowa, New Jersey, Illinois and now Ohio. It said earlier this month it was always the company’s intention to assume ownership of the hospitals.

As for Trumbull Regional’s sister hospital, Sharon Regional Medical Center in Sharon, Pa., the commonwealth agreed to pay $4.5 million — $1.5 million in September, this month and November — to fund operations there through Dec. 1, when it’s expected Meadville Medical Center will close on a purchase of the hospital.

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