- The Washington Times - Tuesday, March 29, 2005

Creditors of the parent company of Greater Southeast Community Hospital are asking the University of the District of Columbia to forfeit hundreds of thousands of dollars in donations from a top executive of the company.

A liquidating trust for creditors of Doctors Community Healthcare Corp. wants the university to pay it $330,000, saying former Chief Executive Officer Paul R. Tuft donated money he had borrowed from the company.

The trust filed legal papers March 15, asking a federal bankruptcy judge to order the university to forfeit the money so that it can be distributed to creditors.

The trust also said UDC officials have ignored deadlines to file a response to the claim after it was filed in U.S. Bankruptcy Court and served to the school in December.

“Defendant is a corporate entity and is not an infant,” the trust’s attorneys wrote in a legal filing earlier this month.

Doctors Community Healthcare Corp., a private, for-profit company, emerged from bankruptcy protection last year.

Mr. Tuft has stepped down as chief executive officer, but remains chairman of the board. He could not be reached for comment yesterday; he did not return e-mails and phone calls by press time.

School officials yesterday acknowledged that UDC had failed to file a response to the trust’s $330,000 claim by the court’s Jan. 10 deadline, but said they still planned to fight the trust in court.

The university said it sought to dismiss the complaint in a response filed in federal court yesterday — more than two months after the deadline and hours after The Washington Times questioned UDC officials about the matter.

A hearing on the claim is scheduled for today in U.S. Bankruptcy Court, according to court records.

“The delay in responding to this complaint is attributable to the diminished manpower resources within the University’s Office of General Counsel,” the university’s statement read.

UDC is expected to argue that Mr. Tuft donated funds not to the school, but to its charitable foundation.

“Records show that donations were made not to the University of the District of Columbia, but rather to the University of the District of Columbia Foundation,” the university said.

In addition, UDC said the foundation’s records show $230,000 in total donations from Mr. Tuft.

It was not clear yesterday why the university and the liquidating trust’s estimates of the donations from Mr. Tuft differed by $100,000.

Formed under court order last year, the trust is charged with acquiring assets on behalf of unsecured creditors who are owed money by Doctors Community, which owns Greater Southeast Community and Hadley Memorial hospitals in the District and other hospitals in Chicago and California.

Since last year, the trust has been piecing together whether any corporate funds were questionably spent by Doctors Community before it went bankrupt in November 2002 in an attempt to recover money and distribute it to creditors.

The trust has filed more than 300 legal actions against entities and individuals that received money from the company that total more than $300 million, saying the money should go to creditors.

Trust Director Sam J. Alberts declined to comment on the complaint against the university yesterday. However, he said in general the trust frequently settles complaints before they go to trial.

“Our duty is to recover assets and to distribute those assets to creditors,” Mr. Alberts said.

“Our hope is that we would be able to sit down and resolve the matter short of trial.”

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