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Steward walks away from Landmark deal

September 26, 2012

WOONSOCKET – It looks like Steward Health Care is walking away from the deal to buy struggling Landmark Medical Center.
While there’s been no official notice from Steward, the special master in charge of Landmark has already begun shopping the hospital around to other prospective suitors.
“We want patients and employees to know we have a Plan B in place and we will be able to discuss the plan in greater detail in the coming days,” Fischer said Wednesday.
The special master, Pawtucket lawyer Jonathan Savage, has been in talks with a number of other prospective buyers “for some time” in anticipation of the possible collapse of the Steward deal, according to Fischer. He said talks with one particular entity have been “very productive and positive,” but he declined to elaborate.
Neither Chris Murphy, a spokesman for Steward, nor Jeffrey Chase-Lubitz, a lawyer who has been representing the Boston-based, for-profit chain of hospitals, could be reached for comment Wednesday.
The news comes just days before Steward’s regulatory deadline for closing on the sale arrives Saturday. Amy Kempe, spokeswoman for Attorney General Peter Kilmartin, said Steward has not asked for an extension, as it has twice before.
Kempe said the asset purchase agreement approved by the court in May 2011 does not require Steward to notify the attorney general in the event the deal collapses.
“We have not heard anything, but the attorney general has asked Steward to keep him informed,” said Kempe.
Speculation that the deal was in trouble intensified after Savage indicated in an unrelated court filing that he no longer anticipates Steward will purchase Landmark, which has been in receivership since June 2008.
"In view of the apparent withdrawal of Steward Healthcare as the purchaser of the hospital assets, it is essential that the Special Master have additional time to negotiate a sale to another purchaser," Savage wrote.
Savage wrote the comments in response to a brief filed by the state Division of Taxation, which is embroiled in a licensing dispute with Landmark. The division is asking the Superior Court to compel Landmark to pay some $6.1 million in licensing fees and penalties immediately, but Savage says the hospital needs more time.
Though he acknowledges that the hospital owes the money, Savage says Landmark cannot afford to pay it now. If the court were to compel the payment to be made, Savage said it’s unlikely the hospital could be sold as a going concern that preserves health care and jobs in the northern Rhode Island area, a paramount goal of the court.
More likely, he said, the hospital would topple into insolvency, forcing the assets to be liquidated, much like those of any other business in receivership.
Judge Michael Silverstein is scheduled to hold a hearing on the issue Oct. 5.

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