ST. LOUIS — The owner of a south St. Louis hospital is under criminal investigation and cannot properly manage the facility, an official in its bankruptcy case said.
St. Alexius Hospital, with campuses in the city's Gravois Park and Dutchtown neighborhoods, filed Chapter 11 bankruptcy in December following months of legal turmoil involving unpaid bills. It's majority owned by Grant White, who leads health care startup Americore Holdings LLC.
The trustee in the case, Paul Randolph, said in a court filing earlier this month that White has mismanaged St. Alexius and three other hospitals, lied to the court, isn't trusted by his lenders and is under both civil and criminal investigation. Because of that, Randolph is asking the court to either transfer control of St. Alexius from Americore to a bankruptcy trustee familiar with health care cases, appoint an examiner to investigate White or dismiss the hospital's Chapter 11 case altogether.
A hearing on the requests is set for Feb. 20. An Americore attorney, James Irving, didn't immediately respond to a request for comment.
Court records show that Americore officials in January told the court that without $1.5 million in financing it would be "iffy" whether the company would be able to meet payroll. An Americore attorney also said that St. Alexius was concerned it could "run out of certain medical supplies and food for patient safety" if cash was not made available, according to Randolph.
"However ... the Debtors have had enough cash to meet three separate payroll obligations," Randolph wrote. "The United States Trustee is unaware how the Debtors, with a supposed dire and imminent need for $1.5 million in (debtor in possession) financing, have been able to continue to operate at least two hospitals," St. Alexius and another in Calico Rock, Arkansas.
Randolph also argued that Americore's lenders "have no trust in Grant White." One, the The Third Friday Fund Total Return LP, whose principal is Michael Lewitt, made such a statement in January. That Florida company loaned White the money needed to buy St. Alexius out of bankruptcy last year.
Randolph said others are willing to lend Americore money, but only if White relinquishes control of the company, which he has refused to do.
He also said that on Jan. 30, the FBI raided an Americore hospital in Kentucky called the Ellwood City Medical Center. The day before, Randolph wrote, the FBI also raided White's residence.
"To the best of the United States Trustee's knowledge, White has not been charged or convicted of any crime," Randolph wrote. "However, the above-described investigations must limit White's ability to devote time to the management of the Debtors." Randolph also alleged that White has "inappropriately siphoned money" from St. Alexius and the other facilities.
Creditors in the case are also asking for a trustee, saying White "has demonstrated incompetence and gross management" before and after the bankruptcy filing.
Court documents also indicate that a California real estate company, Pelorus Equity Group Inc., has sought to purchase St. Alexius. Irving said in a January filing that Jason Reed Vestal and Karl James, two individuals who signed a non-disclosure agreement with Americore regarding St. Alexius, subsequently shared information with Pelorus "seemingly in violation of the non-disclosure agreement."
