Steward paid them a fraction of what it owed. Now it’s suing them to get the money back. - The Boston Globe (2025)

Now, Steward is suing Brewster to get that money back.

The lawsuit is one of over 170 the bankrupt health system filed since April 11, seeking to claw back millions of dollars from vendors in Massachusetts and beyond. The lawsuits allege that Steward prioritized paying some vendors over others before the bankruptcy and that payments to those groups over other creditors was a preferential treatment. To those companies, it’s one last kick from a former business partner.

“In my eyes, you not only took advantage of me for a number of years and I hung in to make sure the patients we care for weren’t affected by your lack of payment,” said Mark Brewster, chief executive of Brewster Ambulance. “Now you want to claw back the little bit you did give me? I’m furious.”

The lawsuits against vendors stand in contrast to what the company so far hasn’t done: claw back money from its top executives or others who profited handsomely while Steward failed. In just the year before bankruptcy, bankruptcy documents show that chief executive Dr. Ralph de la Torre collected $5.2 million, Armin Ernst, who lead Steward’s international entity, received over $900,000, and the construction company CREF, in which de la Torre had a financial interest at the time, reported receiving $37 million in “management fees.”

Meanwhile, several vendors that were sued are still owed money by Steward. Brewster in particular has yet to be paid more than $500,000 by Steward for services before the bankruptcy, and is also waiting to be paid for ambulance rides it continued to provide since the bankruptcy case began. Those services were critical, as Brewster said the ambulance company provided 70 percent of the rides shuttling patients between or home from Steward’s Massachusetts hospitals.

“When you take the footprint south of Boston, there weren’t many other providers,” Brewster said. “That’s why we hung in. If I didn’t transport those patients, they wouldn’t have found (alternatives). I couldn’t have let their poor business decisions affect a patient who needed services. ... I never thought it would be in a bankruptcy and folding up shop and clawing back what you did pay me.”

While they might feel outrageous to vendors, such lawsuits are relatively common in bankruptcy proceedings, said Jim Erving, a restructuring, insolvency and bankruptcy partner at Dentons Bingham Greenebaum LLP in Louisville. The US Bankruptcy code permits debtors or trustees to recover payments made to vendors within 90 days of the filing of a case.

That recovered money is usually redistributed to creditors waiting in line for the company to pay its debts, said Erving, whose firm is representing clients involved in the Steward bankruptcy.

And Steward has targeted a wide range of vendors from which to pull money back.

In Massachusetts alone, the bankrupt health care system is trying to claw back more than $2.8 million. Targets include Lexington-based Eliot Community Human Services, which provides behavioral health services to adults and children, for nearly $300,000; and Baystate Interpreters, in Gardner, for $151,000. Though the bills to Baystate were paid from February to April 2024, they were for invoices dating as far back as 2020.

Steward had wracked up hundreds of thousands of bills to Milton CAT, which provides Caterpillar machines, engines, generators, technology, parts, and services. Invoices went as far back as 2021, and weren’t paid until early 2024. But now, Steward is seeking to claw back $840,000. According to claims filed with the court, Milton CAT says it is still owed more than $100,000 by Steward.

Over 170 of these suits have been filed so far. There will likely be more, said Ethan Jeffrey, an attorney with Murphy & King who has experience in health care insolvencies. The suits are often filed piecemeal as not to overwhelm the court.

Vendors can push back. Those that kept working with Steward after being paid can argue they provided even more value to the organization and seek to reduce Steward’s claims by that amount, said Jeffrey, who is representing several Steward vendors who have been sued for such clawbacks. If the payments also happened within the ordinary course of business, vendors can also argue they didn’t receive preferential treatment.

The theory behind such clawbacks is that certain vendors received such treatment because they were paid before others. By recovering those payments, the court can re-allocate the funds to all creditors, treating them all the same, Jeffrey said.

But that theory is hard to swallow for the targeted firms that are still owed money.

“It’s adding insult to injury,” Jeffrey said. “It’s another nice piece of this mess we call Steward.”

The 90-day window for recoupments is generally for vendors or other groups such as banks who had been paid for an outstanding debt. But the debtor or a trustee can go back even further to recoup money paid to a wider range of people, including officers, directors and other people in control of a company, in some cases clawing back money paid up to six years before the bankruptcy, said Mark Roe, a professor of law at Harvard Law School. Though not all payments can be clawed back.

According to Roe, the clawbacks are generally in cases where the company did not get enough in return for what was paid, while the company was insolvent. Alternatively, clawbacks can come when payments were made to intentionally hinder, delay, or defraud the company’s other creditors. Any such clawbacks would also have to go before the bankruptcy court, as they have in other major cases.

“These things were at the core of the Purdue Pharma bankruptcy,” Roe said, referring to the company that marketed and dispensed opioids that contributed to the nation’s drug crisis. “A huge amount of money (had been paid) to the Sacklers. The fraudulent transfer action was — return all the money.”

Roe said sometimes new management at a company or a trustee can file a claim against former executives. It is unclear who might bring such an action at Steward. Many executives have departed the company and Steward is now being run by its attorneys.

Neither a spokesperson for Steward or its attorneys returned calls for comment.

The funding delay has already impacted affected businesses. Ambulance companies work on thin margins, Brewster said, and the organization has had to cut staffing and other items because of Steward’s unpaid bills. Another $170,000 would hurt, Brewster said.

“The way I look at it, I’ve been chasing them for years for money they owe me,” Brewster said. “If they want to claw it back, you can chase me now.”

Jessica Bartlett can be reached at jessica.bartlett@globe.com. Follow her @ByJessBartlett.