The owners of the bankrupt Steward Health Care system have asked a judge to reject 144 leases with the landlord of its hospitals around the country to make it easier for Steward to sell those hospitals.

Steward filed a motion over the weekend seeking rejection of a master lease with Medical Properties Trust, which covers hospital operations in Pennsylvania, Ohio, Louisiana, Arkansas, Arizona, Texas, and Florida. 

Included in those lease agreements are Trumbull Regional Medical Center in Warren, Hillside Rehabilitation Hospital in Howland, and Sharon Regional Medical Center in Mercer County.

Steward says terms of the Master Lease are “expensive and burdensome, with significantly above-market rental obligations…and have crippled” Steward’s operations for years.

Steward says the rents were negotiated in different interest rates and healthcare operating market environments with different capitalization rates, saying the existing rents are higher than current market rates.

In January, three months before Steward filed for Chapter 11 bankruptcy, Medical Properties announced that Steward was $50 million behind on its rent for the hospitals it operated in eight states.

The motion claims that Steward’s efforts to garner purchase agreements for hospitals in Louisiana, Arkansas, and Florida have been challenged by the “self-interested involvement and interference of their landlord, Medical Properties Trust, Inc.”

Steward tells the bankruptcy court that MPT has “imposed daunting requirements on potential hospital buyers interested in acquiring the Debtor's hospital operations as a going concern.”

The motion claims MPT is demanding hospital buyers obtain MPT’s consent to sever the master lease and enter into an agreement with MPT to acquire or lease the underlying real property.

“Disappointingly, MPT has leveraged purported authority under the Master Leases to undermine the Debtors’ sale process” Steward claims.

The hospital system accuses its landlord of communicating with its bidders without permission in an alleged violation of bidding procedures approved by the court.

Steward also says that in addition to directing bidders to allocate the value of their bids to MPT’s real estate, Medical Properties is also making demands that would siphon the property’s value to MPT.

“MPT’s undermining behavior and brinksmanship jeopardizes the future of dozens of hospitals, tens of thousands of jobs, and the safety of patients. This cannot be tolerated,” Steward says in its motion.

The motion does not say there are any pending offers to buy Steward’s three Valley hospitals.

21 News has reported that the non-profit Meadville Medical Center is in the early stages of negotiation to keep Sharon Regional Medical Center operating.

As of Monday, Medical Properties had not filed a response to Steward’s motion.

MPT emailed the following statement to 21 News claiming they have been working to help keep Steward’s hospitals open:

“We categorically reject any accusation that MPT has interfered with Steward’s marketing and sales efforts - on the contrary, we have proactively worked with potential bidders to address real estate-related matters. Steward’s lawyers are wrongly blaming MPT for holding up sales when in fact Steward has refused to sell hospitals in order to extract value from MPT. The rent that Steward agreed to pay in the leases with MPT is a small fraction of Steward’s revenues, and in fact is dwarfed by the fees being charged by the professionals in this bankruptcy case. Despite Steward’s recent attempts to rewrite history, their own statements at the outset of the bankruptcy process make clear their financial stress is a product of their own operating failures – not rent obligations.”

MPT has less than three weeks to file an answer to the motion.