For those who have not followed the unfolding inquiry into a California healthcare finance company, let's begin with a primer:
Shortly after the Securities and Exchange Commission charged Medical Capital Holdings with fraud last July, a federal judge put the company under control of a receiver.
Since then, receiver Thomas Seaman has filed regular reports as he has combed through Medical Capital's books (and related companies) to get a clear picture of its operations and assets as the fraud complaint works its way through the court. In a filing last month, two executives named in the SEC complaint denied the allegations.
So what has the receiver found so far?
For one, Seaman unearthed an $18 million investment in a stalled feature film about the 1957 Little League World Series, which, with some maneuvering, landed in theaters in April to mixed reviews. (While critic Roger Ebert glowed. Time Out New York did not “…this Cinderella sports story rings false from first pitch to last.”)
Seaman's other findings are more sobering.
Investors are owed $1.08 billion in principal, Seaman told the court in April. He has collected roughly $27 million, more than half of which came from selling off assets. But other assets—loans against medical receivables worth roughly $542.9 million—are “not viable or no longer exist,” he said. Seaman has also brokered deals to sell off an abandoned hospital in Atlanta has moved to foreclose or sell its stake in a shuttered New York hospital.