Case Studies

Receivership of Healthcare Businesses in Partnership Dispute

J.S. Held Acquires Shechter & Everett to Expand Forensic Accounting Capabilities for Family Law Disputes in Florida

Read More close Created with Sketch.
Home·Receivership of Healthcare Businesses in Partnership Dispute

The Situation

As receiver of three related healthcare entities at the center of a heated partnership dispute – a surgery center, a medical office building and a personnel company – our experts profitably managed the businesses while crafting, mediating, and implementing a settlement between the two feuding surgeon-owners and their lawyers.

The partners were fighting over issues including financial management, cash distributions, personal expenses, surgery center access (one surgeon locked out the other surgeon), and tenant leasing. After failing to resolve their disagreements, one partner initiated a court case and sought appointment of a receiver.

How We Advised

As receiver, our win-win solution included:

  • Thorough forensic accounting to determine the amounts and legitimacy of partner distributions and expense reimbursements, then defining a “true-up” amount for past financial inequities.
  • Clarifying medical billing procedures by entity to ensure fair economics for the partners.
  • Reorganizing ownership of the surgery center.
  • Selling the medical office building for the benefit of both partners (in-process).
  • Dissolving the personnel company.
  • One surgeon remained in the office building while the other relocated his practice.

Obstacles & Our Solutions

  • One surgeon took multiple unapproved distributions of the majority of the surgery center’s cash.
    • We inspected historical banking transactions for the businesses, including distributions to business partners and the legitimacy of expenses.
    • Our experts calculated, and got the surgeons to agree to, a “true-up” amount and stipulated it to the court.
  • The surgeons attempted billing procedures to bypass income-sharing, including one surgeon “locking out” his partner from using the surgery center.
    • We managed billing and collections of medical receivables through an on-site healthcare administrator, thereby ensuring they were properly billed.
  • Extreme ill-will between the partners complicated their agreeing to a partnership dissolution.
    • We prepared an independent accounting to facilitate a settlement.
    • We controlled bank accounts and all cash activity to prevent further disputes while continuing to operate the businesses, generating income for the partners, during receivership.
    • Our team mediated and settled daily disputes between the partners.
    • We led mediation between the partners, resulting in the successful separation of the assets (sale of building) and businesses.
  • The businesses remained operating, serving patients throughout the receivership.
    • We managed the businesses’ healthcare administrator, overseeing and reviewing medical billing, narcotics/controlled substances and HIPAA practices.
    • We reviewed accounts receivable and managed pursuit of outstanding claims to optimize cash flow.
    • We oversaw staffing and managed payroll.

Related Practice Areas

> Receiverships
Federal and state courts, creditors, and legal counsel choose our team to serve as Receiver of distressed businesses and real estate entities. We stabilize operations and cash flow, safeguard business assets, and pursue methods to maximize financial recovery. Our multidisciplinary team applies a wide breadth of restructuring and industry experience as Receiver to take control of companies facing financial, operational, and legal issues.

 

> Solutions for Distressed Situations
We deliver integrated solutions for distressed and insolvent businesses that maximize recovery, mitigate risk, and restore enterprise value. Our experts are retained to help distressed organizations stabilize operations, protect stakeholder interests, and execute turnaround strategies. We take an operationally-focused approach that looks beyond the balance sheet to minimize further degradation and build a path to sustainable growth.

Key Contact

For additional information about the engagement or to learn more about our services, contact:

Our Experts