This article has been updated under the heading “Potential New Management.”
Healthcare Conglomerate Associates (HCCA) has confirmed that it may not be able to make payroll for its employees Thursday — and that the responsibility for those payments ultimately rests with the Tulare Local Healthcare District.
Additionally, attorneys with the district have moved forward in attempting to reject the hospital’s contract with HCCA, stating that they would be open to keeping HCCA in for a temporary period and that a company, with emergency financing, has been identified to assume control over the hospital’s operations when the contract is rejected.
Marshall Grossman, counsel for HCCA, told the Voice that the hospital management company, which the district has contracted to manage the hospital, has provided the board with at least one loan option to ensure that employees continue to be paid.
“There is that risk, and HCCA is doing everything within its power short of making further loans to the district,” Grossman said.
But he made clear that HCCA’s main responsibility under the contract is to manage the hospital. The board, he said, has to ensure that the employees can be paid, and HCCA has provided them with the information to make that happen, he said.
“They’ve also had available to them at least one specific opportunity for a $20m loan by a responsible publicly-held company, and that opportunity was made available by Dr. Benzeevi, he reported it to the district board and the district board has taken no action to complete the negotiations for that $20m,” Grossman said.
He also said that the district has chosen not to look into opportunities to use its “substantial non-hospital assets at its disposal,” such as buildings that are “not essential for the operation of the hospital.”
“The district has an opportunity to encumber or sell those assets so that the employees are paid and so that the patients are protected. They apparently haven’t lifted a finger to do so,” he said.
“HCCA is sending one last final plea to the [district’s] board to step up to the plate and fund at least this one payment. And we know they’ve got the availability of funds to do so, and they need to draw on those funds to do so, instead of effectively forcing HCCA to make the payments because the primary obligor — namely the district, isn’t doing so,” Grossman said.
“I can tell you that for several days now, they’ve had the full information about the identity and amount of funding that is almost assuredly available, if they’ll just engage the lender; but, for reasons unknown to us, they have yet to engage the lender,” he continued.
But Kevin Northcraft, chairman of the Tulare Local Healthcare District’s Board of Directors, said that it’s surprising HCCA would tell the Voice what they won’t tell their own board.
“[Benny Benzeevi, CEO of HCCA has] made no proposals to us for any options to look at,” Northcraft said.
Northcraft also stated that he hasn’t received any information on loans from HCCA, either.
Board Moves Forward to Reject Contract
Attorneys for the district have also moved forward in their bid to petition the Bankruptcy Court for the Eastern District of California to reject HCCA’s contract with the district.
They’re seeking an emergency hearing on October 12 at 10:30am, in Courtroom 13 of the court, located at 2500 Tulare St, Fresno, CA.
In a declaration filed by Riley C. Walter, a bankruptcy attorney for the district, he claims that HCCA has “threatened to terminate or suspend all employees of the hospital, which will imperil health and safety of patients and result in a cessation of hospital operations,” necessitating the shortened time-frame of the hearing.
Northcraft, in his own declaration, claims that HCCA threatened to “terminate or suspend” its employees at the hospital on October 6 at 6:12PM, unless an agreement was reached by the following day; as of publication time, the Voice has not received any information indicating that employees have been terminated or suspended.
In a motion that the district seeks to have the court approve, the district calls the contract “a one sided, oppressive, overly expensive, unconscionable and unlawful agreement,” stating that the district has “other viable alternatives at more competitive prices, and much more favorable terms.”
It also claims that HCCA had “declared its intention to cease paying its employees” on October 6 and on October 9.
Potential New Management
In the motion, the district’s attorneys state that Wipfli LLP/HFS Consultants would “step in and assume control over the operations of the hospital and healthcare facilities” once HCCA’s contract was rejected, and that the company has “arranged needed emergency financing.”
A declaration by Northcraft states that HFS had “made arrangements with a healthcare provider of signfiicant size, located in Fresno, to provide emergency interim management of the District’s healthcare facilities and provide emergency funding to keep the hospital open for an interim period of time.”
The district’s motion also stated it would be willing to enter into “an arrangement acceptable to the [district] where HCCA would cooperate in an orderly and peaceful transition to a new operator for a transitional period of 30 days post rejection.”
What Funds Does the District Have On Hand?
Under the terms of the Management Services Agreement, which continues to govern the relationship between HCCA and the district until a bankruptcy judge rules otherwise, funds deposited into the hospital’s bank account are transferred to accounts controlled by HCCA on a nightly basis.
HCCA may then use the funds received from those transfers — or from any of the district’s bank accounts — to pay itself the required management fee, any required reimbursements, or repayments for advancements made to the district.
It’s unclear whether those transfers have stopped, or whether the amounts coming in are so small that loans are still needed to make payroll.
Neither Grossman nor Northcraft could immediately confirm whether those transfers had stopped, though the Voice is waiting on a response from Grossman, and will update this article when one is received.
Attorneys for the district have previously indicated that the board is in the dark on its financial situation, going so far as to ask employees and members of the public to come forward with any knowledge on basic items, such as the hospital’s bank branch location.
Even the board’s hired consultants, Wipfli/HFS Consultants, state they have “not been able to obtain any meaningful financial information” on the hospital’s condition.
Grossman also questions the motivations of those on the board.
“These same people that serve on the board are the same one who led the opposition to the attempted bond issue, which would have raised sufficient funds to complete the tower and to finance the operations of the hospital. So they cut off that source of financing,” Grossman said.
“There’s no transparency here on the part of anybody, other than HCCA or Dr. Benzeevi. So somebody’s got a stake in the outcome of all of this — and the public doesn’t know who it is,” Grossman told the Voice. “These are questions that need to be asked, and need to be answered. Hopefully that will occur in the framework of the bankruptcy proceedings.”
Using publicly-available campaign filings, the Voice has previously published interactive graphs and raw reports of donations to Citizens for Hospital Accountability, the campaign committee which has financed Mike Jamaica, Senovia Gutierrez, and Northcraft’s campaigns for election. Those reports are current as of July 10.
Grossman claimed that the board had no rational reason for withdrawing a resolution allowing HCCA to execute loans on behalf of the district, given its financial condition — and that it has no rational reason to not execute a loan now, to ensure employees are paid and operations continue.
“The potential lender is going to be putting up funds for the District to meet the District’s obligations — why in God’s name wouldn’t the District be open to this opportunity with open arms instead of ignoring it?” he asked.
For his part, Northcraft says he simply hasn’t received any information at all.
“I haven’t gotten an email text or letter from [Benzeevi] in probably a month, other than the agenda packet for the last regular meeting,” he said.
18 thoughts on “UPDATED: HCCA Counsel: Employees’ Pay Could Rely on Board Paying HCCA”
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Just a few months ago Kumar and Benzeevi were boasting about the hospital’s financial situation. Now we need to sell hospital properties and borrow 20 million dollars? Why can’t HCCA pay the employees?
Benzeevi you are the most incompetent dishonest criminal hospital CEO in the Central Valley.
How about Benzeevi and Alan take a pay cut, and HCCA lowers the percentage that they take from the hospital?????
How about we get an actual leader in TRMC and not just a money hungry Boss! All thats been going on, has only showed us loyal employees that Benzeevi does not care about this community, this hospital or the staff. Benzeevi couldnt lead me to the taco truck in the parking lot! This hospital needs Real Leadership and guidance.
LIES, LIES, Lies!
Benzeevi: Pay your employees you worthless excuse for a human being! You’re such a disgrace as a doctor. Absolutely pathetic. Open your eyes-Your business has crashed!!! You’ll be jobless in no time. Loser.
Benzeevi could not care less about the people of Tulare and as soon as he finishes bleeding the hospital dry he will go his merry way. He is a greedy rotten person and an insult to the title of “doctor.”
“They’ve also had available to them at least one specific opportunity for a $20m loan by a responsible publicly-held company, and that opportunity was made available by Dr. Benzeevi, he reported it to the district board and the district board has taken no action to complete the negotiations for that $20m,” Grossman said.”
Would this be the loan company that Benny runs out of his house with an outrages interest rate so he can bleed the hospital more?
Furthermore – source has told me all the employees know that Germany is out looking for another job as he is accusing Benny of lying to him over supplying the new board with the loan documents. Yes – Germany has decided to throw Benny under the bus to save his butt…
As far as a Benny bank account (one that I know of) is Chase Bank in Tulare
1079 E Prosperity Ave
Tulare, CA 93274
When employees checks were bouncing many were then going right to the bank to cash their checks out of fear they would bounce in their account. So they would go to chase where the check was issued from – cash it – then deposit the cash in their accounts. Even worse is the employes were charged 8.00 service fee to cash the checks if they did not bank there. So 8 bucks docked from their pay as they cashed a payroll check, sweating it out hoping the check would be good! And that is not to mention the over draft fees some were charged that deposited the checks right in their accounts when checks bounced!
Then apparently, the Chase bank got upset, as they were kicking out all this CASH and the banks don’t like to do this as they only have so much cash on hand. At least half of the employees were doing this and with 500 employees that was a lot of cash the bank was giving out because of Benny.
The checks normally were issued at 7:00 in the morning. So what Benny did when the bank got upset is then change the time to pick checks up at 1:00 – 3:00 PM. This way the employees were working and would not have the time they had in the morning before their shifts to cash them – and would have to do it during their lunch shift – or not at all and just wait till they got off work. So that made the night shift people have to come in during the day – their off shift – to pick up the check if they wanted to cash it.
Most wanted to cash it as soon as possible for fear the longer they waited the more chance the check “would not be good” if the account got tapped out – or – early bird gets the worm.
I can’t believe the amount of stress these employees must go through each and everyday seeing that they don’t know if the check is good? Will they get a check? Be threatened there won’t be a check? Will they be able to pay their mortgage, bills??
I for one can not wait to see Benny and gang thrown to the curb!! Despicable crooks and liars!!
Simple question: 500 employees? Really? Employees at the meeting in Sept. stated 95 employees. Who all is trying to collect paychecks?
Furthermore…..HCCA is their employer not TRMC. They are responsible for payroll and related taxes. If it were me and my check bounced not once but twice I would be at Fair Labor immediately. Probably one of Benny Boy’s checks could cover the entire payroll.
Why are you guys staying there? It is only going to get worse if you stick with HCCA. Sure hope he is paying the psyroll taxes….oh wait he will blame that on the board too!!!
First of all, LindaMaloy, The hospital employed OVER 500 employees – maybe not that now the last couple weeks…I’m not sure what you mean by 95 employees? Maybe that is how many showed up at the meeting?
Anyway – the bounced checks just started 5 pays ago I believe – they get paid every 2 weeks. You want the details? Sure..
Everyone had direct deposit – then about 4-5 pay periods ago no one was paid on payday by direct deposit. Crooked Benny made up some lie telling the employees that the money did not transfer and the checks would be cut to the employees the next day or something. Then some of the checks were bouncing when they were deposited. Next the employees got a letter stating they were no longer doing direct deposit for the next pay coming up – of course the whole time not stating the reason was they didn’t have the money but just the transfer error and it was being solved.
So the next pay period everyone got checks instead – this is the second pay period – but some not feeling good about what happened the last time went to the issuing bank were the checks were issued by to cash the checks first.
Then another pay period – same thing – people just cashed the checks as if by some chance they bounce you can get a lot of over draft fees.
Then they were told they wont get paid the last time, because of no funds – though Benny coughed up the money somehow. Now this week same thing..
So the first 2 -3 pay periods the employees were lied to and told it was just an error and why run to the labor board when they tell you it was an error on their part and they were correcting it and sorting it out.
Now the last pay period was the first the employees were told that they wont get paid unless the new board approves his crooked loan. So not much time the employees had to see what has been really going on with the payroll part of it.
Another odd thing is that during Kumar’s recall from the old board – last July – Crooked Benny (HCCA) gave money to Kumar for his recount of the votes because if you want a recount you have to pay. They did not want the new board member to replace Kumar. Since that time has been the issues with the payroll. So it is very clear why he paid Crooked Kumar for a recount as Kumar would approve all of his crooked loans..no questions asked…
Kumar didn’t want to be replaced as equally bad as I am sure Benny didn’t want him to be. Probably why all the reports of big Shred-It trucks.
The question is will Benzeevi come clean on who his partners are or will he continue to stand as the lone principal of HCCA?
um…500 employees still there, I think not. Anybody whose still there, cannot leave for whatever reason otherwise they would be gone. The ship is already sinking any body with skills who are still holding on are great heroes for your dedication and love for your hospital and your job God bless you.
My paycheck comes from HCCA. While TRMC may be responsible to HCCA to cover payroll, HCCA alone is responsible for paying its employees. We are after all IT’S employees not TRMCs. If HCCA didn’t want that responsibility they should have left the employees as employees of TRMC. But greed said that they could charge 30% for benefits and by cutting employee benefits they could pocket the difference. More profit. It didn’t benefit the employees to work for HCCA, the benefit all belonged to HCCA. It was a gamble but greed won out and now he and HCCA are responsible to pay employees. The state gives 7 business days from the end of the pay period for a busi ess to pay employees. So if we are not paid by Saturday night i hope all feel free to file a complaint with the state of California. I will.
My God bless you all for sticking around.. but there is life after TRMC.. and a better one awaits out there. It’s really not worth the stress!! Once a thief always a thief…once a liar always a liar Bensleazy…Kumar
July 10, 2017: Hospital is showing record revenue & profit.
July 12, 2017: Hospital does not have money to pay employees.
Where did the money go?
We demand to see the books.
We will petition the governor. He cannot ignore 500 signatures.
Wow this just gets worse and worse this hospital has gotten scammed by 2 crooked CEOs boluki(who by the way called Tulare citizens “a bunch of hicks from the sticks”)and now Benzeevi and all at the expense of the employees it looks as tho this new board is trying hard to rid the hospital of these crooks hopefully now a reputable organization can come in a straighten things up.
And the connection is: KUMAR
Here is where we stand today, Wednesday.
Threats of not paying us employees, MDs, and other vital staff.
Thats all that needs to be said.
Again, we stay because the community needs this hospital. The employees care.
I am making a suggestion right now.
We, the Employees of HCCA, shall seek legal counsel for a Class Action Lawsuit against HCCA for failure to pay employees as perscribed by their policy. Further, employeea then also file with Department of Labor and Standards Enforcement to make sure to fine him for everyday he is late. It is a $100 fine for each employee not paid. So lets say there is 500 employees, do the math.
Dr. BENZEEVI, YOU HAVE CREATED A MESS. AND YOU HAVE MADE YOUR EMPLOYEES PAY FOR YOUR MISTAKES. DO NOT BLAME THIS CURRENT BOARD. THEY ARE TRYING TO SAVE THIS HOSPITAL FOR THE PEOPLE.
If there is a local legal Attourney willing to assist the employees in this matter, please leave info. I will rally the troops and we will get this done. We can not have anymore delays in pay.
To the community, we will continue our best to serve you. We are here for you, and the Board is currently doing their do diligence to fix this issue. Please stand fast with us.
Thank you for all your efforts to stay committed to the community … we appreciate it .. it will turn around with the current board just give them time and a chance
I do have 2 questions Mr. Grossman.
Why if your client HCCA has been touting we have been making money over months and months that we are so broke that he camt pay vendors, MDs, and staff?
Why dosen’t your firm force HCCA to open the books, have an independent audit?
I can probably answer that.
1. To the first question, we havent been making money for a long time. Further, HCCA put Southern Inyo into the same boat as we are. I’m sure that our money has been supporting them. Remember, since you are legal counsel, you are subject to penalties, and you are an officer of the court. Are you sure you want to put yourself in jeopardy?
2. HCCA has been a fraud from the start. By now, the tower should have been completed, hospital should have been in the positive, and this hospital should be thriving. But, as we see, you still have not produced financials. This means there is sketchy money issues.
Mr. Grossman, show the people the books uncooked and be truthful.