Arguments were heard Friday morning and will be continued to Monday.
Members of the Tulare Local Healthcare District’s Board of Directors have taken their first strike at Healthcare Conglomerate Associates (HCCA) in court.
Lawyers with McCormick Barstow, the firm which represents the district, will argue in favor of a proposed temporary restraining order that would prevent HCCA from entering into any contracts on behalf of the district, putting up any assets of the district as collateral, entering into any loans, or settling any lawsuits against the district without a vote of the majority of the board.
The firm is also requesting an injunction that would force the hospital management company to turn over large amounts of detailed financial data, including payroll reports, financial statements, balance sheets, bank reconciliations, vendor contracts, and accounts payable reports.
They’ll join lawyers from the Tulare County District Attorney’s office when they head to the Tulare County Superior Court court on Friday morning.
The District Attorney’s office plans to argue that Bruce Greene, a lawyer representing Healthcare Conglomerate Associates, and Richard Torrez, a board member, should be forced to recognize Senovia Gutierrez as a seated member of the hospital’s board.
Board members Kevin Northcraft, Mike Jamaica, and Senovia Gutierrez had previously voted to rescind HCCA’s authority to seek loans on behalf of the district, but officials with HCCA stated that because Gutierrez hadn’t been recognized by the existing board, such a vote wasn’t official or legal.
A temporary restraining order would provide an end-run around any disagreement over Gutierrez’ status.
Northcraft and Jamaica both claim that time is of the essence, and that the hospital management company may currently be seeking to execute a loan, in contravention of their vote.
“I have recently been informed by employees of the District that HCCA and its agents have been taking inventory of personal property and equipment belonging to the District,” Jamaica states. “I have been informed that HCCA’s apparent purpose for inventorying the District’s property is so that HCCA can obtain a loan in the approximate amount of $100 million, and HCCA intends to use the District’s real and personal property as collateral and security for the loan.”
Nikole Cunningham, an attorney representing the district, states in a declaration that she sent a letter to HCCA advising them against any moves to secure a loan without the consent of the board, and requesting written confirmation that the company wouldn’t move to take out any such loan.
Cunningham claims she never received a reply.
In both Jamaica’s and Northcraft’s declarations, they state that they were informed by employees of the hospital that HCCA “failed to pay several obligations to Hospital vendors, including the Hospital’s linen and meal providers, which caused those vendors to discontinue service to the Hospital on September 11, 2017,” information which the Voice has also independently received from sources at the hospital.
They also state that they were informed that “the Hospital’s supply of saline is dangerously low, and other necessary hospital supplies are also low,” but that no member of hospital management has provided them with any information regarding those issues or others, including a recent confirmation by Southern California Edison that electricity bills for the tower construction project have gone unpaid.
Arguments by McCormick Barstow and the district attorney’s office will be heard at 8:30am, September 15, in Department 1 of the Tulare County Superior Court at 221 S. Mooney, Visalia.
Dr. Benny Benzeevi, CEO of Healthcare Conglomerate Associates, did not reply to a request for comment regarding this story, or prior requests for comment regarding information the Voice received that the district might be pursuing a loan. Should a response be received, this article will be updated.