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July 13, 2022, US Bankruptcy Court for Northern Texas – Kevin D. McCullough, Plan Trustee (the “Trustee”) of the Pine Creek Medical Center, LLC Plan Trust, sues Dr. Manuel Ramirez (“Dr. M. Ramirez” or the “Defendant”), former board member of Pine Creek Medical Center, LLC (the “Debtor”) alleging breach of fiduciary duties and gross mismanagement. The Trustee also seeks to clawback alleged fraudulent transfers.
The Trustee’s complaint alleges that Dr. M. Ramirez allegedly failed to implement meaningful compliance policies and regulatory controls; allegedly failed to maintain accurate books and records; operated Pine Creek with gross inefficiencies; allegedly habitually ignored serious conflicts of interest and allegedly disregarded corporate formalities. According to the complaint, each of these alleged misdeeds constituted a breach of fiduciary duty and an abuse of control and gross mismanagement.
By background, the complaint also draws attention to a complaint filed under the Federal False Claims Act in 2014 against Pine Creek. The 2014 complaint alleged that Pine Creek violated Stark and Anti-Kickback regulations by inducing and accepting referrals of Medicare patients from physicians with whom the hospital had financial relationships. Later, the government investigation resulted in a $7.5 million settlement with the Department of Justice. The adversary complaint alleges that by allowing Management’s self-serving behavior and management decisions, Dr. M. Ramirez allegedly caused the hospital to waste valuable corporate assets and incur millions of dollars of legal fees defending and settling various government investigations.
The Trustee also seeks to clawback transfers made by Pine Creek to Dr. M. Ramirez during the two-year period before the petition date alleging these transfers were constructively fraudulent under 11 U.S.C. §§ 544, 548(a)(1)(B). The Trustee also requests to recover transfers made by Pine Creek to Dr. M. Ramirez during the four-year period before the petition date under the State Fraudulent Transfer Law.
Kevin D. Mccullough v. Dr. Manuel Ramirez, (In re Pine Creek Medical Center, LLC), AP No. 22-3074, US Bankruptcy Court for the Northern District of Texas.
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