02:01 PM EDT, 09/11/2024 (MT Newswires) -- Medical Properties Trust's ( MPW ) settlement agreement with bankrupt Steward Health Care has won initial approval from a US bankruptcy judge, media outlets reported Wednesday.

The settlement, which would be a step to transitioning Steward hospitals to new operators, is set to receive interim approval from Judge Christopher Lopez, Bloomberg reported.

In exchange for Medical Properties Trust ( MPW ) waiving lease obligations, Steward and its unsecured creditors committee had agreed to drop potential claims against the real estate investment trust, Bloomberg reported, citing lawyers during a court hearing.

Steward's lawyer, Ray Schrock, said that transitioning the hospitals to new operators will help the company avoid additional operating expenses and potentially expensive litigation, according to Bloomberg.

Medical Properties Trust ( MPW ) didn't immediately respond to a request for comment from MT Newswires, while Steward couldn't be reached for comment.