VENTURA COUNTY: Family Health Care Begins Liquidations
Family Health Care Medical Group began liquidating its assets Wednesday after it announced that it would not file for bankruptcy, the Los Angeles Times reports. However, it remains uncertain when FHCMG, Ventura County's largest medical group, will pay debts owed to doctors and other creditors. To avoid the "red tape" and court supervision under federal bankruptcy proceedings, FHCMG will be dissolved under a provision in state law called "general assignment for the benefit of creditors." Chicago-based Development Specialists will oversee the sale of assets and payments to creditors. Geoffrey Berman, vice president of Development Specialists, said, "It's going to be April or May before we could do a distribution." Some officials worried that the lack of court supervision could reduce creditors' chances of ever receiving the estimated $6 million they are owed. However, Mari Zag, a spokesperson for FHCMG, said that those concerns were "unwarranted" because Berman would act as a "neutral referee." Berman added that avoiding bankruptcy proceedings will allow the 45 FHCMG staff doctors who "lost their jobs when FHCMG suddenly folded last week" to find new jobs quickly and allow patients to transfer their records more efficiently. Berman added that it will also "take months" for FHCMG to collect the "millions of dollars" owed to them by managed care companies.
Doctors Angry, Patients Scramble
Some physicians awaiting payments from FHCMG are discussing possible legal action against the medical group's shareholders and board members. Dr. Kenneth Saul, who said that FHCMG owed him and his partners $32,000, contends that FHCMG executives were "handsomely paid even as the company was going down." Meanwhile, in an effort to accommodate FHCMG's 135,000 patients, the county "set aside $250,000 in taxpayer money" for temporary care in its public clinics. The county hopes to alleviate the strain on emergency rooms, which have absorbed FHCMG patients while their insurers assign them to new doctors (Talev, Los Angeles Times, 10/26).