CareMax may sell dozens of its senior healthcare clinics as part of a bankruptcy restructuring as the Miami company grapples with its ties to financially troubled hospital operator Steward Health Care System.
The company agreed to accept a stalking horse bid, or the first official bid arranged in advance of an auction, of $100 million from ClareMedica Health Partners for an undisclosed number of CareMax properties, according to court filings.
CareMax filed for Chapter 11 bankruptcy protection on Nov. 17 in U.S. Bankruptcy Court for the Northern District of Texas. A court hearing is scheduled for Dec. 17 to review the stalking horse agreement.
Last week, CareMax announced it reached the stalking horse agreement but did not identify ClareMedica as the bidder until Nov. 25. CareMax did not respond to CoStar News' request for comment and the list of properties included in the ClareMedica sale agreement.
Steward, based in Dallas, was once the largest for-profit U.S. hospital system. But after problems were reported about Steward’s operations, the company faced questions from lawmakers and is now the subject of a federal criminal investigation, according to the Boston Globe. Steward filed for Chapter 11 bankruptcy protection in May.
CareMax is tied to Steward through its 2021 acquisition of Steward’s Medicare business. The deal allowed CareMax to provide fee-based management services to medical providers in the Steward healthcare network.
When Steward filed for Chapter 11 bankruptcy in May, it asked for court approval to terminate its Medicare business relationship with CareMax, according to a court filing.
CareMax's outstanding leases
If Steward receives approval to terminate the relationship, CareMax said that it may be forced to close the business.
CareMax said last week it had agreed to sell the Medicare management services organization business to Revere Medical for undisclosed terms. That agreement requires bankruptcy court approval.
The healthcare company said in court filings it is dealing with financial issues separate from its relationship with Steward. Those challenges include difficulty making payments on outstanding loans due to rising interest rates, a drop in federal reimbursement rates and rising labor and operational costs.
The company has outstanding leases on 82 properties, of which 46 are healthcare facilities where patients live or receive treatment, according to a court filing. CareMax is obligated to pay about $2.2 million in monthly payments for those leases and has asked for court approval to reject 29 of the outstanding leases to reduce its rent obligations to $1 million per month. CareMax did not identify the location of the leased properties. The company leased or licensed 56 locations in Florida, New York, Tennessee and Texas as of Dec. 31, according to its most recent annual report.
Some CareMax locations in Florida include 9303 N. Florida Ave. in Tampa; 664 E. 25th St. in Hialeah; and 2710 N. Orange Blossom Trail in Kissimmee. CoStar data does not indicate the location of CareMax properties in other states.
Steward’s problems have impacted other commercial real estate companies. Medical Properties Trust, a Birmingham, Alabama-based real estate investment trust, earlier this year demanded Steward pay rent on healthcare properties it continues to occupy. Steward and Medical Properties Trust reached an agreement on the rent dispute in September.
For the record
Sidley Austin is legal counsel to CareMax, Alvarez & Marsal is a financial adviser and Piper Sandler is its investment banker. McGuireWoods is legal counsel to ClareMedica, Ernst & Young is the financial adviser and Raymond James & Associates is its investment banker.