This is the hospital chain that has 9 lives and a complete soap opera over the last few years to along with it. The new owner is also the old owner who filed bankruptcy in 2000 and left patients and others holding the bag, literally. A Chaudhuri-controlled company, KPC Medical Management, collapsed in 2000, disrupting health care for 300,000 Southern California residents. That led state regulators and local physicians to block Chaudhuri’s attempt to take control of IHHI in 2005. But over the past five years he gradually has bought a majority stake. The financing rests in the hands of Silver Point hedge fund.
The other California entrepreneur, Prem Reddy was also bidding for the chain. When in need of money not too long ago, Chaudhuri has contributed a few million to keep them going. During the last year the SEC investigated the former financing company. You can read more at the link below.
SEC Investigation Finds Medical Capital Holdings Diverting Investor Funds to Pornography and Other Businesses Aided by Former IHHI President – Orange County
The physician’s group and Bruce Mogel continued to battle. The doctors have asked that the board sue Mr. Mogel for wrongful conduct as well. He still owns 40% of the corporation through his relationship with Dr. Kali Chaudhuri.
When Santa Ana police briefly arrested Dr. Michael Fitzgibbons at Western Medical Center Santa Ana in June 2006, the lawsuit says, Mogel was watching from a window. "People don't know how powerful I am," he said, according to the lawsuit. The lawsuit by Orange County Physicians Investors Network charges Mogel, Integrated Healthcare Holding Inc.s' chief executive, with breach of fiduciary duty and fraud.
This is a surprise, but he had the guarantee requested by the judge that Prime didn’t have. Over the years it certainly appears this is some kind of a love/hate relationship between Chaudhuri and IHHI. It was odd too that there were no other interested parties here, so with money the hospitals can continue to operate. The next big question, is Bruce Mogel coming back?? OMG, hope not after the scene about setting up one of the doctors on a phony gun charge. BD
The deal puts Chaudhuri, a Hemet orthopedist, in firm control of Integrated Healthcare Holdings Inc., which operates Western Medical Center – Santa Ana and three other hospitals. Chaudhuri already was the majority shareholder of financially troubled IHHI.
Backed by hedge fund Silver Point Partners, he paid $70 million for high-interest loans with a face value of $73.6 million. He upped his bid after U.S. District Judge David O. Carter pronounced his original $55 million bid a "windfall" and "unwholesome."
Chaudhuri beat out another medical entrepreneur with a stormy past, Prem Reddy of Prime Healthcare. Reddy also bid $70 million for IHHI's debt but failed to post a cash guarantee early, as Carter had required.
IHHI attorney David Robinson told Carter that because of its heavy debts the company is "on a precipice. It is living literally day to day."
Creditors seized equipment from the WestMed emergency room, though the hospital later got it back, and doctors and nurses weren't paid on time, Robinson said.
Chaudhuri has been one of the most feared people in California medicine since the October 2000 bankruptcy of his company, KPC Medical Management. Its failure left 300,000 patients without care and, in many cases, without their medical records.
Four years later, when Chaudhuri led IHHI's bid to buy four Orange County hospitals, local doctors protested and a state legislator intervened. He backed away, only to return when the small hospital chain asked him for money to pay its bills.