May be I don't understand the "adversarial" process very. As some have noted, I am not a law school graduate.
but what's you opinion of the following.
the firm Stutman, Treister and Glatt represents Valley Health System in its bankruptcy proceedings. They guided VHS through the process that resulted in the sale of the hospital system to Physicians for Healthy Hospitals.
In order to secure the sale, PHH had to use Dr. kali P. Chaudhuri's funds and guarantees to obtain the financing.
On Thursday, and perhaps this is the legal system's idea of an April Fool's joke, STG approached Judge Peter Carroll and said they were now "engaged by KPC Resolution company, LLC, to represent Resolution as a purchaser in the connection with a receivership proceeding in the U.S. District Court Central Cal.
"Dr. Kali P. Chadhuri is the manager and sole member of Resolution. [He] is also one of the investors in PHH, LLC which owns or will own all or substantially all of the stodck of PHH, Inc."
The law firm has no second thoughts about representing the purchaser of VHS since the VHS board consented! I don't remember that coming up in a board meeting.
Showing posts with label PHH. Show all posts
Showing posts with label PHH. Show all posts
Sunday, April 4, 2010
Wednesday, November 25, 2009
Shh! VHS has another bid, don't tell anyone!
What maybe the most important news about Valley Health System (VHS) was not mentioned at Monday evening’s meeting. In a Nov. 19 letter, Prime Healthcare Services Foundation has submitted an offer to purchase substantially all of VHS’s assets.
In his letter to VHS Chairman, Dr. William Cherry, Michael Sarrao, secretary and treasurer of the Foundation, describes the offer as “… a structure which is similar in many respects to the proposal submitted by Physicians for Healthy Hospitals (PHH) … there are several important differences which make [the Foundation’s] offer far superior to PHH’s proposal for the District, its residents, and its creditors.”
Not only was the new proposal omitted from the agenda, which was prepared on Nov. 20, none of the directors urged consideration of the offer, refuted its value or even mentioned its existence during their individual comments.
VHS’s legal counsel, John Marshall said the letter arrived too late to be printed in the agenda documentation. In addition, he linked the offer to the pending litigation to explain why the board would not discuss it in open session.
“…[I]t was not appropriate to discuss this in open session. While the pending litigation was properly agendized and discussed in Executive Closed Session, the specific terms of Prime's proposal were not discussed,” he said in an e-mail. “In addition, VHS is contractually bound by the terms of the Asset Sale Agreement with PHH approved by the Board in September and which is the subject of the December 15 election. Thus, VHS would be in breach of the agreement with PHH if it entered into negotiations with another party at this time.”
Sarrao also reported that the State Superior court had ordered VHS to release material regarding the sale. VHS had withheld this information (such as their consultant’s(the Piera Group) report on PHH) as privileged information.
Sarrao claims, “[Dr. Kali] Chaudhuri has an ownership interest in PHH and is the managing member of the Physicians for Healthy Hospitals, LLC, the sole shareholder of PHH. We suspect (based on, among other things, the efforts by VHS to shield these reports from disclosure by trying to create a ‘privilege’) the Peira Group reports may include a much more information about the process or lack thereof employed by VHS and PHH.”
Since the board had no new business for action, most the meeting was occupied with a dismal financial report from Interim Chief Financial Officer, Michael Bernstein, who is leaving VHS within weeks.
Thursday, October 15, 2009
VHS + Lawyers + Doctors = Ka-Ching!
As the Emcee sang in "Cabaret",
"Money makes the world go around, It makes the world go 'round.
A mark, a yen, a buck, or a pound"
The federal judge overseeing Valley Health System’s (VHS) bankruptcy petition has granted a special hearing that could result in a challenge of the agreement to sell virtually the entire hospital district to local physicians.
On Tuesday, Oct. 13, the Los Angeles law firm of Latham and Watkins, on behalf of several clients, including save Hemet Valley Hospital and Prime Healthcare Services and three local residents, requested bankruptcy Judge Peter Carroll to lift the a stay to permit the pursuit of state court litigation.
The plaintiffs are challenging the legality of the agreement between VHS and Physicians for a Healthy Hosptial (PHH).
They lodge three principal complaints. First, the challengers argue that VHS was required to notify and to work with the Riverside County Local Area Formation Commission if it plans to divest most or all of its services.
Secondly, “Save Hemet Valley Hospitals” claims that the VHS board has so many connections with Dr. Kali P. Chaudhuri, a Hemet physician and healthcare businessman, its decisions were tantamount to insiders’ actions rather than representatives of district’s constituents.
“The board members’ approval of the sale of VHS to a Chaudhuri entity — while they are employed or receiving substantial financial benefits from Chaudhuri’s other interests — is a patent conflict of interest,” they alleged.
The third major objection focuses on the boards sudden June decision to “explore” a sale and the lapse of only 30 days until it conferred an exclusive negotiating pact with PHH.
VHS’s legal counsel, John Marshall says, “Valley Health System will oppose the Motion.”
The sales agreement between VHS and PHH would provide VHS with about $160 million if you count $55 million of alleged claims from PHH members. Otherwise, PHH needs about $50- $60 million cash to close the deal, borrow some and will then have possession of about $38 million of VHS cash and receivables.
The owner of Prime Healthcare is another physician, turned healthcare entrepreneur, Prem Reddy.
The hearing will be 9:30 a.m., Monday, Nov. 2 at the Federal Bankruptcy Courthouse in Riverside.
Heading to some sports' photo ops and interview in Hemet. More tomorrow, as “the Scalpel twists”.
"Money makes the world go around, It makes the world go 'round.
A mark, a yen, a buck, or a pound"
The federal judge overseeing Valley Health System’s (VHS) bankruptcy petition has granted a special hearing that could result in a challenge of the agreement to sell virtually the entire hospital district to local physicians.
On Tuesday, Oct. 13, the Los Angeles law firm of Latham and Watkins, on behalf of several clients, including save Hemet Valley Hospital and Prime Healthcare Services and three local residents, requested bankruptcy Judge Peter Carroll to lift the a stay to permit the pursuit of state court litigation.
The plaintiffs are challenging the legality of the agreement between VHS and Physicians for a Healthy Hosptial (PHH).
They lodge three principal complaints. First, the challengers argue that VHS was required to notify and to work with the Riverside County Local Area Formation Commission if it plans to divest most or all of its services.
Secondly, “Save Hemet Valley Hospitals” claims that the VHS board has so many connections with Dr. Kali P. Chaudhuri, a Hemet physician and healthcare businessman, its decisions were tantamount to insiders’ actions rather than representatives of district’s constituents.
“The board members’ approval of the sale of VHS to a Chaudhuri entity — while they are employed or receiving substantial financial benefits from Chaudhuri’s other interests — is a patent conflict of interest,” they alleged.
The third major objection focuses on the boards sudden June decision to “explore” a sale and the lapse of only 30 days until it conferred an exclusive negotiating pact with PHH.
VHS’s legal counsel, John Marshall says, “Valley Health System will oppose the Motion.”
The sales agreement between VHS and PHH would provide VHS with about $160 million if you count $55 million of alleged claims from PHH members. Otherwise, PHH needs about $50- $60 million cash to close the deal, borrow some and will then have possession of about $38 million of VHS cash and receivables.
The owner of Prime Healthcare is another physician, turned healthcare entrepreneur, Prem Reddy.
The hearing will be 9:30 a.m., Monday, Nov. 2 at the Federal Bankruptcy Courthouse in Riverside.
Heading to some sports' photo ops and interview in Hemet. More tomorrow, as “the Scalpel twists”.
Wednesday, October 7, 2009
VHS sale set for December vote
The Valley Health System board of directors approved the sale of the hospital district to the local physicians group — Physicians for Healthy Hospitals (PHH).
A specific price was not used during the meeting, but it is in the range of $114 to $118 million.
District voters, including Idyllwild residents, will cast their ballots in favor or against the sale on Dec. 15. The Registrar of Voters announced the election day yesterday.
Despite the urging of more than a dozen doctors for a unanimous vote in support of the sale, Director Robert O’Donnell was lone dissenter on the board that approved the action 6-1.
O’Donnell’s reasons were simple. First, he does not like the idea that if the voters reject the offer, PPH still gets to purchase Menifee Valley Medical Center (MVMC) for $29 million. Secondly, PHH promised but has yet to reveal a business plan, which demonstrates their ability to turn the hospital money sponge-like operations into a clean green profitable machine.
O’Donnell is the only person willing to publicly express a desire to review PHH’s business plan before blessing the deal, but others have expressed similar sentiments. Rob Davis, Hemet attorney who represents one of VHS’s numerous creditors, said his clients and other secured creditors expect to receive cash if the sale actually closes. However, the unsecured creditors committee has apparently requested more information from PHH, including the confidential or unrevealed business plan.
The doctors are paying VHS’ long term debt ($44.7 million), paying VHS’s pre-petition (pre-bankruptcy filing) unsecured creditors ($21 million), assuming “substantial” post-petition debt ($31 million estimate), assuming the $8.4 million owed to Select Healthcare, paying insurance premiums for future malpractice coverage ($4.1 million), giving the VHS remnant $400,000 per year for five years ($2 million), assuming annual and sick leave obligations to current staff ($6.0 million) and relief from contract breach claims levied by PHH “affiliates ($55 million).
Excluding the last item, which does not have a specific verified value, the other payments total $117.2 million. In return, PPH receives real assets, the two hospitals, the Health Center and other real estate appraised at $76 million and cash and accounts receivable of about $38 million.
Many doctors spoke in favor of the sale and PHH’s commitment to higher quality healthcare in the valley. None described how the physicians will find the capital to pay the $80 million and still have money to invest in improving facilities or expanding services.
The agreement requires PHH to maintain “core services” for five years. Basic emergency services are an example of a core service.
One of the non-physicians speaking in favor the transaction was John Petty, Riverside County 3rd District Planning commissioner. After the meeting, he explained his thoughts on why the hospital finances will improve.
“The doctors now have skin in the game. It’s pride of ownership,” he replied. He believes the Hemet Hospital reputation has been severely damaged through the recent referenda votes and now doctors have the incentive to change that reputation.
Summarizing the public’s choice in December, Director Tom Wilson said, “The bottom line when you entertain the idea to sell these facilities is they’re not just bricks and mortar. These are people, lives and safety.”
None of the sale's details were available Tuesday night. VHS counsel, John Marshall said the information including the final agreement will be posted on the district's Web site, www.valleyhealthsystem.com. However this will not occur in time to review the paperwork and still submit a comment to the county Registrar of Voter's office by 6 p.m., Thursday, Oct. 8. This is when arguments for or against the transaction must be filed.
A specific price was not used during the meeting, but it is in the range of $114 to $118 million.
District voters, including Idyllwild residents, will cast their ballots in favor or against the sale on Dec. 15. The Registrar of Voters announced the election day yesterday.
Despite the urging of more than a dozen doctors for a unanimous vote in support of the sale, Director Robert O’Donnell was lone dissenter on the board that approved the action 6-1.
O’Donnell’s reasons were simple. First, he does not like the idea that if the voters reject the offer, PPH still gets to purchase Menifee Valley Medical Center (MVMC) for $29 million. Secondly, PHH promised but has yet to reveal a business plan, which demonstrates their ability to turn the hospital money sponge-like operations into a clean green profitable machine.
O’Donnell is the only person willing to publicly express a desire to review PHH’s business plan before blessing the deal, but others have expressed similar sentiments. Rob Davis, Hemet attorney who represents one of VHS’s numerous creditors, said his clients and other secured creditors expect to receive cash if the sale actually closes. However, the unsecured creditors committee has apparently requested more information from PHH, including the confidential or unrevealed business plan.
The doctors are paying VHS’ long term debt ($44.7 million), paying VHS’s pre-petition (pre-bankruptcy filing) unsecured creditors ($21 million), assuming “substantial” post-petition debt ($31 million estimate), assuming the $8.4 million owed to Select Healthcare, paying insurance premiums for future malpractice coverage ($4.1 million), giving the VHS remnant $400,000 per year for five years ($2 million), assuming annual and sick leave obligations to current staff ($6.0 million) and relief from contract breach claims levied by PHH “affiliates ($55 million).
Excluding the last item, which does not have a specific verified value, the other payments total $117.2 million. In return, PPH receives real assets, the two hospitals, the Health Center and other real estate appraised at $76 million and cash and accounts receivable of about $38 million.
Many doctors spoke in favor of the sale and PHH’s commitment to higher quality healthcare in the valley. None described how the physicians will find the capital to pay the $80 million and still have money to invest in improving facilities or expanding services.
The agreement requires PHH to maintain “core services” for five years. Basic emergency services are an example of a core service.
One of the non-physicians speaking in favor the transaction was John Petty, Riverside County 3rd District Planning commissioner. After the meeting, he explained his thoughts on why the hospital finances will improve.
“The doctors now have skin in the game. It’s pride of ownership,” he replied. He believes the Hemet Hospital reputation has been severely damaged through the recent referenda votes and now doctors have the incentive to change that reputation.
Summarizing the public’s choice in December, Director Tom Wilson said, “The bottom line when you entertain the idea to sell these facilities is they’re not just bricks and mortar. These are people, lives and safety.”
None of the sale's details were available Tuesday night. VHS counsel, John Marshall said the information including the final agreement will be posted on the district's Web site, www.valleyhealthsystem.com. However this will not occur in time to review the paperwork and still submit a comment to the county Registrar of Voter's office by 6 p.m., Thursday, Oct. 8. This is when arguments for or against the transaction must be filed.
Wednesday, September 16, 2009
VHS terms with PHH
Last night, the Valley Health System (VHS) directors approved a tentative agreement with the local physicians group — Physicians for Healthy Hospitals (PHH) — for the purchase of the hospital district.
A final definitive agreement is not ready for approval, but the physicians and hospital directors were getting nervous about the timing of a necessary voter approval and the approaching December and January holidays, according to VHS counsel John Marshall.
Consequently, the board adopted a memorandum of understanding with PHH that outlines the more general or basic terms and asked the county Registrar of Voters to schedule a polling place election or a mail-in ballot election or some combination of the two. The election would occur on Tuesday, Dec. 15.
The doctors are willing to pay the existing bond debt ($42.5 million), provide $21 million for unsecured creditors, assume post-petition (means debt incurred after bankruptcy was file in December 2007) of $25 to $30 million, pay a $8.4 million not to Select Healthcare and relief on other claims amounting to $50 million, eventually this might be reduced substantially.
In aggregate, PHH says it is willing to ante up $156 million for the system. VHS would sell all of its assets (with a few minor exceptions such as a small limited trust account).
In 2007, Select Healthcare’s $135 million offer for the whole district, including Moreno Valley Medical Hospital, was rejected at the polls.
The board voted 6-1 to accept the terms and request the registrar to establish an election if the directors finally accept and approve a sales agreement.
Both Board President Dr. William Cherry and Marshall indicated that the final agreement and related documents will be available in several weeks. But Marshall warned that the sheer volume of paper and number of lawyers involved will slow the process although establishing the election day will be a strong motivator.
The sole dissenter was Director Robert O’Donnell. He was disappointed that PHH did not present a business plan to demonstrate how it will generate additional revenue to pay its own debt.
VHS’s inability to create sufficient profits to pay debt and cover current expenses has been a major criticism of recent management
When asked how the doctors’ group could accomplish this task, Director Glen Holmes, chair of the Ad Hoc committee that has negotiated for the board, asked to discuss it on Thursday.
“A lot of the hospital’s deficit is the cost of bankruptcy. That’s about $300,000 per month,” replied Dr. Alex Denes, PHH spokesman. “That will disappear because we’ll be out of bankruptcy.”
He also said the doctors plan to re-established the healthcare contracts with local groups that the former management team had canceled. He also believes that patients will return to VHS facilities because the doctors can improve the image of the hospitals.
“Nearly 50 percent of residents were seeking healthcare outside the hospital district,” he noted.
If the voters reject this offer, as they did two years ago, an "Alternative Transaction" will be effective. PHH can purchase Menifee Valley Medical Center for $29 mllion. Apparently, some VHS officials have concern about this possibility since one whole slide of Marshall's presentation addressed "Concerns abou the Alternaive Transaction", such as the district will still have one hospital — Hemet — and substantial debt.
For those still excited about this transaction and healthcare finances, go to JP's blog for additional thoughts and comments.
A final definitive agreement is not ready for approval, but the physicians and hospital directors were getting nervous about the timing of a necessary voter approval and the approaching December and January holidays, according to VHS counsel John Marshall.
Consequently, the board adopted a memorandum of understanding with PHH that outlines the more general or basic terms and asked the county Registrar of Voters to schedule a polling place election or a mail-in ballot election or some combination of the two. The election would occur on Tuesday, Dec. 15.
The doctors are willing to pay the existing bond debt ($42.5 million), provide $21 million for unsecured creditors, assume post-petition (means debt incurred after bankruptcy was file in December 2007) of $25 to $30 million, pay a $8.4 million not to Select Healthcare and relief on other claims amounting to $50 million, eventually this might be reduced substantially.
In aggregate, PHH says it is willing to ante up $156 million for the system. VHS would sell all of its assets (with a few minor exceptions such as a small limited trust account).
In 2007, Select Healthcare’s $135 million offer for the whole district, including Moreno Valley Medical Hospital, was rejected at the polls.
The board voted 6-1 to accept the terms and request the registrar to establish an election if the directors finally accept and approve a sales agreement.
Both Board President Dr. William Cherry and Marshall indicated that the final agreement and related documents will be available in several weeks. But Marshall warned that the sheer volume of paper and number of lawyers involved will slow the process although establishing the election day will be a strong motivator.
The sole dissenter was Director Robert O’Donnell. He was disappointed that PHH did not present a business plan to demonstrate how it will generate additional revenue to pay its own debt.
VHS’s inability to create sufficient profits to pay debt and cover current expenses has been a major criticism of recent management
When asked how the doctors’ group could accomplish this task, Director Glen Holmes, chair of the Ad Hoc committee that has negotiated for the board, asked to discuss it on Thursday.
“A lot of the hospital’s deficit is the cost of bankruptcy. That’s about $300,000 per month,” replied Dr. Alex Denes, PHH spokesman. “That will disappear because we’ll be out of bankruptcy.”
He also said the doctors plan to re-established the healthcare contracts with local groups that the former management team had canceled. He also believes that patients will return to VHS facilities because the doctors can improve the image of the hospitals.
“Nearly 50 percent of residents were seeking healthcare outside the hospital district,” he noted.
If the voters reject this offer, as they did two years ago, an "Alternative Transaction" will be effective. PHH can purchase Menifee Valley Medical Center for $29 mllion. Apparently, some VHS officials have concern about this possibility since one whole slide of Marshall's presentation addressed "Concerns abou the Alternaive Transaction", such as the district will still have one hospital — Hemet — and substantial debt.
For those still excited about this transaction and healthcare finances, go to JP's blog for additional thoughts and comments.
Subscribe to:
Posts (Atom)