- The Washington Times - Sunday, December 21, 2003

A top executive for the parent company of Greater Southeast Hospital refused to answer questions about $4 million in travel-related expenses during a court-ordered deposition, but the company still is expected to keep control of the hospital when bankruptcy proceedings conclude next month.

Paul Tuft, chief executive officer for Doctors Community Healthcare (DCHC), declined to answer questions about his fallout with Melvin Redman, the company’s former chief operating officer, according to recently filed court documents.

Mr. Tuft and Mr. Redman were partners in Tuft-Redman Enterprises LLC, and creditors want to know more about the split after their offshoot company earnedroughly $4 million last year from DCHC while the hospital was going broke.

Mr. Tuft and Mr. Redman leased an eight-passenger jet through Tuft-Redman, then used the plane on DCHC business.

The District had given DCHC tens of millions of dollars since 2001, yet the hospital remained understaffed and mismanaged until recently. Some city officials, including D.C. Council member David Catania, at-large Republican, are especially interested in the travel-related income and the millions of dollars in personal loans that DCHC gave to Mr. Tuft and other executives last year.

DCHC was selected as the primary contractor for the D.C. Healthcare Alliance in 2001. The alliance is the $80 million public-private pact funded by the D.C. government to improve health care for low-income residents.

DCHC filed for bankruptcy in November 2002. More than a year later, Mr. Tuft, two other company executives and a group of investors have won the right to buy back Greater Southeast pending a judge’s approval.

The investment group last week placed a high bid of roughly $150 million during an auction of DCHC assets, which include Greater Southeast and Hadley Memorial hospitals in the District and two other hospitals, one in Chicago and the other near Los Angeles.

U.S. Bankruptcy Judge S. Martin Teel Jr. is expected to issue a ruling on the deal next month.

Creditors next month also will ask the judge to order Mr. Tuft to testify about his fallout with Mr. Redman, court documents show.

Creditors won a court order in October to review the personal finances of Mr. Tuft to determine whether to file claims against his estate.

But during a Dec. 3 deposition, Mr. Tuft’s attorneys told him to refuse to answer questions about the termination of Mr. Redman’s employment from Tuft-Redman, according to court papers filed by Sam J. Alberts, attorney for the creditors.

The fallout between Mr. Tuft and Mr. Redman is clearly stated in legal papers filed in a separate lawsuit in Maricopa County, Ariz., where both men live.

Mr. Redman filed the lawsuit against Mr. Tuft last year for $500,000, claiming he was never paid for his shares in Tuft-Redman after agreeing to turn over his ownership in the company to Mr. Tuft.

In court papers, Mr. Tuft claims Mr. Redman was so upset at the breakup that one of Mr. Redman’s associates staked out his housewhilebrandishing a gun. Mr. Redman’s attorneys deny the claim as “an incredible assertion” and say Mr. Tuft is trying to avoid testifying in a deposition.

Mr. Tuft, Mr. Redman and Tuft-Redman are also defendants in a separate lawsuit filed by Raytheon Aircraft Credit Corp. The Kansas-based airplane seller claims that Tuft-Redman failed to make payments on an eight-passenger jet that the firm leased in 2001.

Mr. Tuft appears likely to retain control of Greater Southeast next month through his $150 million bid, which dwarfed outside bids from other health care companies.

City officials hope that DCHC’s keeping control of Greater Southeast will not end progress made at Greater Southeast in recent months.

The hospital regained its operating license last month, receiving passing grades from the D.C. Department of Health, which nearly shut down the hospital during the summer.

Last week, the Joint Commission on Accreditation of Healthcare Organizations restored the hospital’s accreditation.

The ruling means private health care plans will begin paying for services provided at the hospital.

Several health plans refused to pay for services after the hospital lost its accreditation two months ago.


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