A federal bankruptcy judge has ordered top executives for the parent company of Greater Southeast Community Hospital to disclose their personal assets as a condition for approving the corporation’s bankruptcy-reorganization plan.
The plan by Doctors Community Healthcare Corp. would allow the company to emerge from bankruptcy with Greater Southeast and Hadley Memorial Hospital in the District and two other hospitals in Chicago and California.
U.S. Bankruptcy Judge S. Martin Teel Jr. approved the plan last week, but said that Doctors Community executives must disclose all of their assets — including cash, bank accounts, investments and all items worth more than $10,000.
Greater Southeast received more than $30 million from the D.C. government to serve the city’s low-income residents after Doctors Community purchased the facility out of bankruptcy four years ago.
However, the company went bankrupt in November 2002, two days after the FBI raided the offices of its primary lender, Ohio-based National Century Financial Enterprises, when company officials could not account for millions of dollars.
Judge Teel’s ruling came two weeks after a trustee with the U.S. Justice Department voiced concerns about a provision in the reorganization plan that would shield company officials from liability lawsuits.
In his ruling, Judge Teel said Doctors Community Chief Executive Officer Paul R. Tuft could lose his liability release if he fails to disclose his assets, including property transfers to his wife, Nancy. The judge also ordered Doctors Community executives to settle more than $260,000 in Medicare overpayments to Greater Southeast since 2000.
The U.S. Department of Health and Human Services last month objected to the company’s reorganization plan, saying it failed to say how company officials would repay the money.
In a prepared statement, Mr. Tuft said the approval of his company’s plan to retain Greater Southeast represents a second chance.
“Today, we have the rare second-chance opportunity to push forward our goal of develop great inner-city hospitals offering top quality health care and hospital service,” Mr. Tuft said in a statement.
Mr. Tuft, whose company purchased Greater Southeast out of bankruptcy four years ago, said he had no plans to close the facility.
“Greater Southeast is the gem of our holdings,” Mr. Tuft said. “I am deeply and personally committed to assuring its success and growth over the long term future.”
His company won a lucrative contract to provide care for the city’s poor under the city-funded D.C. Healthcare Alliance after D.C. General Hospital closed in 2001.
Yet Greater Southeast nearly closed last year after failing inspections and experiencing emergency-room staffing shortages. The city’s only hospital east of the Anacostia River, Greater Southeast since has regained its full license and accreditation.
“Greater Southeast has made a remarkable recovery from the past year’s difficulties,” Mr. Tuft said.
“It is now fully licensed, fully accredited and fully prepared to deliver more and better services to the community.”
Court records show the hospital still is losing money. Greater Southeast lost $2.8 million in February, according to court filings.
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