Publications

October 25, 2024 – Yale New Haven published its proposed amended complaint against the Prospect group on October 22, 2024. The complaint details that Prospect is in equally bad shape, if not worse, than Steward. So dire is the situation that Prospect’s Waterbury Hospital’s neonatal unit was unable to test for jaundice in newborns on-site. Prospect is in breach of its asset purchase agreement, which Yale now seeks to void. Connecticut hospitals are operationally non-compliant and functionally insolvent. Communities face a healthcare emergency because MPW and Prospect will not come to the table. The docket is attached to this report and includes the proposed amended filing.

October 22, 2024 – In Q2 2023, MPW engaged in significant uncommercial round-trip transactions with its European tenants, Median and Priory Group, via sale-leaseback transactions. Both tenants are owned by Waterland Private Equity. MPW’s assertions about the solvency of its tenants are fairytales told to shareholders and analysts. MPW’s rent roll is almost exclusively distressed, and management continues to portray these tenants as not only a going concern, but a sound investment. Priory Group has been operationally loss-making for years and relies on the proceeds of sale-leaseback transactions to remain solvent. Priory is MPW’s third largest tenant by asset exposure, and largest unencumbered credit. Priory Group operational losses widened to £73m in 2023. Priory’s rent is recorded as “finance costs”. This is not included as operational expenses or in Priory’s non-GAAP operational measurements (EBITDA). Median scraped by with an operational margin of 2% in 2023 and posted €100m of losses over the last 2 years due to a commercially unsustainable capital structure. The company is severely cash-flow deficient and recorded €111m of Free Cash Flow losses across 2022 and 2023, relying on sale-leasebacks to survive. In 2023, MPW engaged in a sale-leaseback transaction with Median in which it purchased €16.1m worth of real estate for €70m (representing a 335% mark-up), resulting in a €53.9m gain on sale to Median.  

October 15, 2024 – Late on October 14, 2024, Medical Properties Trust (“MPW”) issued a press release[1], signed only by the independent members of MPW’s Board. It states that the findings of an independent investigation conducted by Wachtell, Lipton, Rosen & Katz (“Wachtell") completed in February 2023 contradict widely reported and evidenced reporting into MPW’s fraudulent activities. This is an embarrassing and tacit admission of securities fraud by MPW. In an apparent attempt to dismiss the devastating findings of the OCCRP & Boston Globe, MPW’s independent directors have relied on the results of a materially dated "independent" investigations to claim "ignorance" of MPW's criminal conduct. The findings of the “no limitations or restrictions” investigation conducted by Wachtell (which are now almost 2 years old), have been thoroughly debunked by detailed reporting across various investigative journals, including the OCCRP, The Boston Globe, Wall Street Journal and The American Prospect

October 11, 2024 – On October 8, 2024, Viceroy’s counsel received a letter from Trumbull County Commissioner, Niki Frenchko, requesting the release of Medical Properties Trust (MPT/MPW)’s discovery information in the public interest of their community. We have attached the letter to this report. The letter also details what appears to be a racketeering scheme orchestrated by MPW, whereby MPW appear to be covertly hiring lobbyists, attorneys, and healthcare executives, and threatening to shut down it own hospitals, in order to draw (more) money from taxpayers. The MPW playbook has been to prop up operators in service of its inflated asset values. When those operators inevitably fail, they are replaced with a new batch of disgraced, MPW-funded fronts, whose only purpose is to preserve the fake value of MPW’s property. Behind closed doors the Warren City Hospital group was represented by a group consistently advocating for MPW’s benefit. After Warren County officials called out this charade, Insight Health was installed as the operator despite their ineligibility as a bidder for these operations in the Steward bankruptcy. The requested discovery information from the commissioner is confidential under a protective order. Viceroy cannot release information to the county without MPW’s consent or the court’s approval.

October 1, 2024 – MPW’s lawyers have submitted a heavily redacted, hilarious brief to the court ahead of a status conference to be held today. In this brief, MPW have taken completely irrelevant and out of context messages from Viceroy’s communications, redact them, and claim in a public document that these redacted quotes confirm we are liars. MPW and its lawyers have clearly done this in a daft attempt to sway public opinion to their futile, idiotic lawsuit. To that end, we will disclose below all the redacted texts (they are under the defendant’s protective order, after all), and show you the context of these discussions in their original WhatsApp format. Enjoy.

September 25, 2024 - Below is Viceroy's brief on status conference issues. Steward's bankruptcy filings have more than exonerated our thesis, from the round-tripping of payments to the inflated values of MPW's real estate. Viceroy intends to file a summary judgement motion to dismiss MPW's baseless lawsuit.

September 18, 2024 – The Steward bankruptcy court has rubber-stamped a deal to allow MPW to appoint interim operators, most of which are as mismanaged, insolvent, and/or fraudulent as Steward. In its releases MPW stated it would provide aggregate loans of up to $80m to the interim operators, some of which are empty shells, and expects cash rent payments (which crippled Steward) by Q4 2026. We note that MPW faces its own liquidity challenges, and is unlikely to live to see any rent collections. This is a disastrous deal for MPW stakeholders, designed for the purpose of falsely preserving inflated real estate values as MPW faces a liquidity crunch. MPW cannot raise capital or issue debt. It is actively selling assets during covenant waivers and already junk-rated. Any further revaluations of MPW’s book will give cause for MPW’s lenders to call their debt. MPW lacks the liquidity to cover its Q1 2025 maturities without massively diluting equity holders. MPW will record new straight-line rent against new 18-year lease terms, despite not receiving any rent for 2 years. This fabrication will ensure management meets FFO requirements for their compensation targets. The vast majority of MPW’s tenants are financially distressed/bankrupt. MPW has round-tripped revenues to itself in the form of disguised financing for years. The majority of the Steward replacement operators appear to fall into the same category. Viceroy have compiled a rap-sheet for each of MPW’s newly appointed interim operators in the report available below.

September 9, 2024 - Viceroy has notified Medical Properties Trust of the depositions of their CEO Ed Aldag, CFO Steve Hamner and Head of Investor Relations Drew Babin. They are trying to delay them but they can't run or hide from the can of worms they opened when the company falsely accused Viceroy of a non-existent conspiracy. The notices are available below.

July 30, 2024 – Well folks there it is. On July 26, 2024, Steward Health Care threw in the towel and called time on Master Lease II over 8 MPW hospitals in Massachusetts. These hospitals were contributed by MPW into the seemed-like-a-great-idea-at-the-time joint venture with Macquarie which the company touted as validating its absurd valuations. The irony of using a deal that helped drive its tenant into bankruptcy as an example of business sustainability is not lost on us. No bidder was willing to assume Master Lease II under its current terms. No bidder put in a bid for the entire enterprise (real estate included) that even came close to the value of the real estate implied by the lease. Every bidder requested significant rent concessions or a significant discount to acquire the property. No actionable bids were received for the Carney and Nashoba Valley hospitals. Steward’s filing states base annual rent obligations of $114m at a current lease rate of 9.29%. Working backwards this results in a lease base of $1.23b, substantially less than what MPW valued the property at in its books. It’s clear that MPW’s entire book must be impairment tested and is grossly overvalued. We believe the only reason the company appears to be refusing to offer rent concessions or discounts is that it would trigger a disastrous revaluation. As you can imagine we have very little faith in MPW’s auditors PWC who have presided over this mess since 2008. We hope this serves as an extremely late wake-up call. Investors should ask themselves how many other skeletons are hiding in the closets in Birmingham.

July 3, 2024 – On July 1, 2024, the Organized Crime and Corruption Reporting Project (OCCRP) along with the Boston Globe and the Times of Malta published damning exposes of the illegal surveillance and harassment campaign conducted by Medical Properties Trust’s largest tenant. In what is either a staggering coincidence or a mad dash for the exits: we note that Quinn Emanuel litigation partner Jomaire Crawford appears to have left the firm entirely. Ms Crawford was the principal counsel at Quinn Emmanuel handling MPW’s baseless legal claim against Viceroy Research.

July 1, 2024 – Earlier today several news websites published the details of an unlawful campaign of surveillance and harassment by Steward Health Care. The articles are available at the links below. https://www.occrp.org/en/investigations/us-healthcare-firm-embroiled-in-malta-corruption-scandal-spent-millions-on-private-spies https://timesofmalta.com/article/revealed-steward-funded-smear-campaign-chris-fearne.1094706 https://www.bostonglobe.com/publications/metrosteward-health-care-surveillance-intelligence-gathering/?event=event12 Our full statement is available below.

May 28, 2024 - The DOJ have filed an objection to MPW's Debtor-in-Possession financing terms for Steward Health Care. They cite the terms are unfair and force the sale of Stewardship, without regard for antitrust procedures, in reference to its sale of of Stewardship, Steward's physician-owned network. Below is the filing by the DOJ. We anticipate further obstacles to MPW's attempts to salvage what it can from Steward's bankruptcy.