Steward Health Care System LLC is in the post-confirmation phase of a Chapter 11 liquidation, with the SHC Creditor Litigation Trust and SHC Plan Administrator Trust now administering the estate after the Joint Chapter 11 Plan of Liquidation was confirmed on July 25, 2025; the Court held its most recent status conference on June 18, 2026, where the trusts reported on plan implementation, claims reconciliation, and active avoidance and insider litigation.
The case began on May 6, 2024, when Steward—then the largest private, physician-owned hospital system in the United States, operating 31 hospitals across roughly 10 states with nearly 30,000 employees—filed for Chapter 11 protection alongside dozens of affiliated debtors. The filing followed a period of acute liquidity pressure: the debtors entered bankruptcy carrying approximately $1.57 billion in prepetition secured and unsecured debt across eight facilities, including a $305.5 million FILO facility agented by Brigade, a $247.3 million ABL facility agented by Sound Point, a $216.7 million MPT TRS note, and a $363.3 million unsecured investor note, all documented in the first-day Castellano declarationDkt. 38. To stabilize operations and fund the case, the debtors secured a FILO DIP facility providing $225 million in new money and $150 million of roll-up, backed by an interim $75 million draw and a final order in July 2024; maturity was later extended through July 17, 2025 under a settlement and Amendment No. 6 with the FILO secured parties.
Rather than reorganize around a standalone going concern, Steward pursued a liquidating plan. The Court confirmed the revised Joint Chapter 11 Plan of Liquidation on July 25, 2025, establishing two successor vehicles: the SHC Creditor Litigation Trust, charged with prosecuting estate claims, and the SHC Plan Administrator Trust, responsible for claims reconciliation and wind-down. According to the , the Litigation Trust has generated $58.4 million in its first ten months, expanded its insider complaint from roughly $1.5 billion to nearly $4 billion in alleged damages, reached a settlement in principle with Cerberus, and resolved 213 of 355 commenced preference actions for $13.05 million in cash plus $5.04 million in administrative-expense waivers, with 97 actions still pending seeking approximately $52.5 million. The Plan Trust, meanwhile, has reduced secured, administrative, and priority claims by more than $10.3 billion since the December 15, 2025 status conference and has initiated procedures to resolve over 500 prepetition personal-injury claims.
The case remains active on multiple contested fronts. On June 18, 2026, the Court entered a Fourth Amended Order streamlining avoidance-claim proceduresDkt. 6613 with fixed settlement, mediation, and litigation tracks, together with omnibus claim resolutions—the Fourteenth Omnibus Objection expunging 137 late-filed claimsDkt. 6610 and the Sixteenth Omnibus Objection reducing 63 claims from roughly $37 million to $19 millionDkt. 6611. Appeals of the Confirmation Order and a Conversion Order are currently stayed pending mediation with the Commonwealth of Massachusetts; the insider complaint is in discovery with mediation still open; the Tenet Health motion to dismiss remains under advisement; the BCBS antitrust matter is set for a Rule 16 conference on August 11, 2026 with trial dates reserved for late 2027; and Norwood claim fact and expert discovery is expected to conclude in September 2026 with summary judgment briefing in December 2026.
