A recent report from Birmingham, Ala.-based Medical Properties Trust, the largest hospital landlord in the U.S., touched on the possibility of U.S. Securities and Exchange Commission activity and government investigations regarding some of MPT's assets and tenants.
The report, filed on Feb. 29, noted that congressional efforts have led to an increase in federal oversight regarding healthcare facilities.
"An unfavorable resolution of pending or future litigation, regulatory proceedings, governmental inquiries, or other claims could have a material adverse effect on our and our tenants' business, results of operations and financial condition," the report said. "Regardless of outcome, any litigation, regulatory proceeding or governmental inquiry, and related adverse publicity, may result in substantial costs and expenses, significantly divert the attention of management, and materially damage our reputation."
Should an investigation lead to an unfavorable outcome, MPT could be faced with "significant fines, judgments, or settlements, which, if not indemnifiable by our tenants, or if uninsured, or if exceeding insurance coverage, could adversely impact our financial condition, cash flows, results of operations, and the trading price of our common stock."
The recent report comes amid continued financial struggles for Dallas-based Steward Health Care, whose landlord is MPT.
MPT, whose Steward cash base portfolio is $3.5 billion, said it is working with the health system through a plan to strengthen its liquidity, restore its balance sheet, and optimize MPT's ability to recover unpaid rent after Steward was $50 million behind in year-end rent to MPT.
A spokesperson for the SEC told Becker's that it does not comment on "the existence or nonexistence of a possible investigation."
Becker's reached out to MPT for a comment regarding the possibility of an SEC investigation and will update this story as more information becomes available.