Steward Health Care accuses former leaders of greed and bad faith in bankruptcy filing
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Some stories in corporate America feel too brazen to be true, especially when they unfold inside the walls of hospitals.
In this case, what's being alleged isn't just fiscal mismanagement—it’s personal enrichment at the expense of patient care.
A once-sprawling health care empire is now collapsing under the weight of accusations that could reshape the way Americans think about for-profit medicine. And at the center of it all are executives accused of profiting while communities suffered.
Steward Health Care, which once held the title of the largest for-profit hospital system in the US, has filed for bankruptcy and blamed its implosion on four former executives.
Among them is company founder and ex-CEO Dr. Ralph de la Torre, who—along with Michael Callum, James Karam, and Sanjay Shetty—is accused in court documents of looting over $245 million from the company.
The filing states: “Through their greed and bad faith misconduct, [these former insiders] operated Steward with the aim of enriching themselves at the expense of the Company, its creditors, and the patients and communities that Steward served.”
All while many hospitals in the system were left “perpetually undercapitalized and insolvent.” The court filing outlines a strategy that involved using a real estate investment firm, Medical Properties Trust, to extract capital from hospitals through sale-leaseback agreements.
Steward would buy hospitals, sell the buildings to MPT, and lease them back at high cost—enabling executives to generate dividends while hospitals racked up debt.
A CBS investigation found that in some facilities, unpaid invoices led to shortages of critical medical equipment. One Massachusetts hospital reportedly lost a life-saving device to repossession just weeks before a new mother bled to death after giving birth.
As the hospitals struggled, Steward’s former CEO allegedly indulged in extravagant personal spending. Court documents cite the purchase of a $30 million yacht, a Texas horse ranch, and two corporate jets worth $95 million.
Steward claims de la Torre took $111 million in dividends in early 2021, with an additional $81.5 million later that year.
Also read: Is the healthcare system in trouble? Why doctor retirements could spark a crisis
Other payouts went to Callum ($10.3 million), Shetty ($1.8 million), and Karam ($728,456), while $4.3 million was reportedly funneled to Steward Health Care International, a company de la Torre controlled.
Steward also accuses the group of overpaying by $200 million for five Miami-area hospitals—an acquisition the court says was driven by de la Torre’s “personal desire to build a hospital empire.”
In another transaction, the executives allegedly diverted $134 million in stock proceeds from a Medicare Advantage business sale to a holding company they owned.
According to the complaint: “De la Torre, Callum, and Karam were grossly negligent and breached their duties of care, loyalty, and good faith.”
Meanwhile, the health system became unable to pay vendors and staff at hospitals across multiple states.
After its bankruptcy filing, Steward sold six Massachusetts hospitals, displacing approximately 1,200 workers. Patients and communities dependent on those hospitals were left scrambling for alternatives amid the closures.
“I’m disgusted. It’s selfish. It’s greed,” Massachusetts Governor Maura Healey said in response to the fallout. The system, once promoted as a savior for struggling hospitals, had now become a cautionary tale of unchecked corporate power in health care.
Steward Health Care is now run by a court-appointed administrator and actively pursuing recovery of the diverted funds. Federal investigators are reportedly examining de la Torre for possible fraud, embezzlement, and violations of the Foreign Corrupt Practices Act.
Also read: A healthcare crisis in motion—Sudden shutdowns could leave gaps in critical care
He has denied all wrongdoing and refused to appear before a Senate committee investigating the company’s collapse, even after being subpoenaed. A spokesperson said he “disputes the allegations of wrongdoing and will vigorously defend himself against them.”
For patients, particularly older Americans who depend heavily on community hospitals, the Steward collapse underscores the stakes of privatized health care.
Financial engineering and real estate speculation may have benefited top executives, but for many patients and employees, it meant dangerous supply shortages, missed paychecks, and shuttered facilities.
As one report noted, Steward’s hospitals left behind a trail of unpaid bills and potentially life-threatening conditions. In the end, the system built to deliver care became a case study in what happens when corporate interests overtake public good.
Read next: Healthcare giant announced possible closures–Is your community’s healthcare in jeopardy?
Have you been affected by hospital closures or care delays in your community? What do you think needs to change to protect patients from financial mismanagement in health care? Share your story in the comments—and help others stay informed by passing this on.
In this case, what's being alleged isn't just fiscal mismanagement—it’s personal enrichment at the expense of patient care.
A once-sprawling health care empire is now collapsing under the weight of accusations that could reshape the way Americans think about for-profit medicine. And at the center of it all are executives accused of profiting while communities suffered.
Steward Health Care, which once held the title of the largest for-profit hospital system in the US, has filed for bankruptcy and blamed its implosion on four former executives.
Among them is company founder and ex-CEO Dr. Ralph de la Torre, who—along with Michael Callum, James Karam, and Sanjay Shetty—is accused in court documents of looting over $245 million from the company.
The filing states: “Through their greed and bad faith misconduct, [these former insiders] operated Steward with the aim of enriching themselves at the expense of the Company, its creditors, and the patients and communities that Steward served.”
All while many hospitals in the system were left “perpetually undercapitalized and insolvent.” The court filing outlines a strategy that involved using a real estate investment firm, Medical Properties Trust, to extract capital from hospitals through sale-leaseback agreements.
Steward Health Care accuses former leaders of greed and bad faith in bankruptcy filing. Image source: Hush Naidoo Jade Photography / Unsplash
Steward would buy hospitals, sell the buildings to MPT, and lease them back at high cost—enabling executives to generate dividends while hospitals racked up debt.
A CBS investigation found that in some facilities, unpaid invoices led to shortages of critical medical equipment. One Massachusetts hospital reportedly lost a life-saving device to repossession just weeks before a new mother bled to death after giving birth.
As the hospitals struggled, Steward’s former CEO allegedly indulged in extravagant personal spending. Court documents cite the purchase of a $30 million yacht, a Texas horse ranch, and two corporate jets worth $95 million.
Steward claims de la Torre took $111 million in dividends in early 2021, with an additional $81.5 million later that year.
Also read: Is the healthcare system in trouble? Why doctor retirements could spark a crisis
Other payouts went to Callum ($10.3 million), Shetty ($1.8 million), and Karam ($728,456), while $4.3 million was reportedly funneled to Steward Health Care International, a company de la Torre controlled.
Steward also accuses the group of overpaying by $200 million for five Miami-area hospitals—an acquisition the court says was driven by de la Torre’s “personal desire to build a hospital empire.”
In another transaction, the executives allegedly diverted $134 million in stock proceeds from a Medicare Advantage business sale to a holding company they owned.
According to the complaint: “De la Torre, Callum, and Karam were grossly negligent and breached their duties of care, loyalty, and good faith.”
Meanwhile, the health system became unable to pay vendors and staff at hospitals across multiple states.
After its bankruptcy filing, Steward sold six Massachusetts hospitals, displacing approximately 1,200 workers. Patients and communities dependent on those hospitals were left scrambling for alternatives amid the closures.
“I’m disgusted. It’s selfish. It’s greed,” Massachusetts Governor Maura Healey said in response to the fallout. The system, once promoted as a savior for struggling hospitals, had now become a cautionary tale of unchecked corporate power in health care.
Steward Health Care is now run by a court-appointed administrator and actively pursuing recovery of the diverted funds. Federal investigators are reportedly examining de la Torre for possible fraud, embezzlement, and violations of the Foreign Corrupt Practices Act.
Also read: A healthcare crisis in motion—Sudden shutdowns could leave gaps in critical care
He has denied all wrongdoing and refused to appear before a Senate committee investigating the company’s collapse, even after being subpoenaed. A spokesperson said he “disputes the allegations of wrongdoing and will vigorously defend himself against them.”
For patients, particularly older Americans who depend heavily on community hospitals, the Steward collapse underscores the stakes of privatized health care.
Financial engineering and real estate speculation may have benefited top executives, but for many patients and employees, it meant dangerous supply shortages, missed paychecks, and shuttered facilities.
As one report noted, Steward’s hospitals left behind a trail of unpaid bills and potentially life-threatening conditions. In the end, the system built to deliver care became a case study in what happens when corporate interests overtake public good.
Read next: Healthcare giant announced possible closures–Is your community’s healthcare in jeopardy?
