What remains of Dallas-based Steward Health Care System and the trustee in the hospital operator’s bankruptcy litigation have expanded their lawsuit, accusing former Steward CEO Dr. Ralph de la Torre and other Steward leaders of causing $3.4 billion in damages to the system and its creditors. De la Torre and other Steward executives are accused of enriching themselves while the private health system collapsed around them.
In addition to Steward, Mark Kronfeld is the plaintiff in the lawsuit. He is a seasoned prosecutor and represents the trust established in the Steward bankruptcy litigation to investigate and prosecute alleged wrongdoing on behalf of the system’s creditors, including former employees, patients, and vendors. He first filed the lawsuit in July, but the scope of damages grew to $3.4 billion in the most recent amended complaint in late November.
The complaint describes a years-long scheme in which renowned heart surgeon de la Torre convinced private equity firm Cerberus Capital Management to purchase a Massachusetts hospital network operated by the Archdiocese of Boston in 2010. The acquisition formed Steward Health Care System and converted it into a for-profit endeavor, but Massachusetts imposed a condition prohibiting the company from issuing dividends from hospital operations for five years. When the five-year monitoring ended, the lawsuit says the misconduct began…