Aug 19 (Reuters) - Bankrupt Steward Health Care sued its

landlord on Monday, saying it has impeded Steward's effort to

sell 31 hospitals in an effort to "siphon all value" for itself,

leaving little or nothing for Steward's hospital operations or

its other creditors.

Medical Properties Trust ( MPW ) has insisted that its real

estate is much more valuable than Steward's hospital operations,

and its position has thus far prevented Steward from

successfully selling the hospitals, the privately owned

Dallas-based hospital chain said in a complaint filed in Houston

bankruptcy court.

"MPT's sales process interference and brinksmanship

jeopardizes the future of dozens of hospitals, tens of thousands

of jobs, and the safety of patients," Steward said.

The lawsuit asked U.S. Bankruptcy Judge Christopher Lopez,

who is overseeing Steward's bankruptcy, to step in and determine

how proceeds from future hospital sales should be allocated

between the hospital operations and the real estate.

MPT did not immediately respond to a request for comment.

Steward, which filed for bankruptcy protection in May,

initially began leasing property from MPT as a result of a

controversial 2016 transaction in which Steward's former private

equity owners sold the land to MPT and saddled the company with

high long-term rent obligations. Steward, initially based in

Massachusetts, then began a nationwide expansion in partnership

with MPT, eventually growing to operate 31 hospitals in eight

U.S. states.

Massachusetts politicians and U.S. Senators have attributed

Steward's financial instability to its private equity owners,

corporate management and landlords, arguing that they have

enriched themselves while undermining patient care.

Steward did not immediately respond to a request for

comment.

Steward announced the closure of two Massachusetts hospitals

in July, and Massachusetts officials announced that one

additional hospital would be seized and transferred to a new

owner.

Steward has attempted to address its $9 billion debt by

selling all of its hospitals, but it said that MPT has blocked

its efforts to transfer the hospitals to new owners.

It has been unable to convince MPT to sell its real estate

to new hospital operators on reasonable terms, or enter into new

leases with the buyers, and the "disputes have prevented

otherwise viable sales from proceeding," Steward said.

Steward's other creditors intend to file a separate

complaint challenging the transactions that led to MPT's

ownership of the hospital real estate, according to Steward. The

creditors' action would "raise a bona fide dispute as to whether

MPT actually owns the underlying real property," Steward said in

Monday's complaint.

The case is In re: Steward Health Care System LLC, U.S.

Bankruptcy Court for the Southern District of Texas, No.

24-90213.

For Steward: Ray Schrock of Weil, Gotshal & Manges

For Massachusetts: Hugh McDonald and Andrew Troop of

Pillsbury Winthrop Shaw Pittman

For Medical Properties Trust ( MPW ): Emil Kleinhaus of Wachtell,

Lipton, Rosen & Katz

Read more:

Bankrupt Steward Health puts its hospitals up for sale,

discloses $9 bln in debt

Bankrupt Steward Health Care sells physician network as

Massachusetts hospital seized

Bankrupt Steward Health to close two Massachusetts hospitals

US Senate probes Steward Health bankruptcy, subpoenas CEO