The Tulare Local Health District has emerged from bankruptcy years after being thrust into financial turmoil after its former hospital management engaged in a litany of financial crimes.
The district, which oversees Adventist Health Tulare, announced that it received its full discharge from bankruptcy on April 29.
The big picture: Bankruptcy Court Judge René Lastreto II in the Eastern District of California issued the order to discharge the district from bankruptcy.
- That ends the Chapter 9 proceedings which were filed in 2017.
- The district remains obligated to make scheduled payments to unsecured creditors for the next five years, but it now has the freedom to fully operate without any constraints from bankruptcy court.
What they’re saying: Tulare Local Health District Board President Kevin Northcraft said the discharge is the culmination of years of dedicated efforts to stabilize and rebuild the district’s operations and financial health.
- “We are incredibly thankful to the Court, our legal and financial teams, and especially to our community for their continued support throughout this journey,” Northcraft said. “Ongoing use of Adventist Health facilities within our district will help ensure a healthier future for the 88,000 residents and visitors we serve.”
The backstory: The district had to file for bankruptcy due to the mismanagement of Healthcare Conglomerate Associates (HCCA) with the former Tulare Regional Medical Center.
- HCCA operated Tulare Regional Medical Center from 2014 to 2017, with Yorai “Benny” Benzeevi serving as CEO.
- Benzeevi was sentenced in the corruption case last November, avoiding prison time after being accused of corruption and embezzlement. He was ordered to pay $2.4 million in total in restitution – $2 million to the Tulare Local Healthcare District and $400,000 to Southern Inyo Healthcare District.
- He had been charged with 40 felonies and six misdemeanors and ended up accepting a plea deal for six felonies and two misdemeanors.
- Former HCCA CFO Alan Germany also agreed to a plea deal to stay out of jail, which required him to apologize for his role in the financial crimes committed while operating the hospital.
- Former HCCA attorney Bruce Greene was also charged in the case with conflict of interest, grand theft, conspiracy, money laundering and multiple counts of embezzlement. He appears to be headed to trial.
