Integrated Healthcare Holdings, Santa Ana, Calif., said it is in negotiations with lenders to take over loans originally made to the company by Medical Capital Corp., Tustin, Calif. A company of Kali Chaudhuri, Integrated's main shareholder, and Silver Point Capital, a distressed-debt investment firm in Greenwich, Conn., purchased the loans for $70 million during an auction in U.S. District Court in Santa Ana last week, according to court records.
Integrated in talks over Medical Capital loans
Medical Capital's parent, Medical Capital Holdings, and two of MCH's executives face fraud allegations brought by the U.S. Securities and Exchange Commission. The two executives denied the allegations in a court filing last week.
Ken Westbrook, Integrated's president and CEO, wrote in a letter to employees that the company is in discussions with “solid and respected lenders” for new loans to pay off Chaudhuri and Silver Point. The agreement with Chaudhuri and Silver Point gives the company sufficient time and financing to negotiate the new loans without adversely affecting Integrated's four hospitals, which are located in Orange County, Calif., wrote Westbrook, who supplied his letter to Modern Healthcare.
Prime Healthcare Services, Victorville, Calif., also bid on the loans, according to court records.
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