Integrated Healthcare Holdings Inc., the Santa Ana-based hospital operator at odds with its biggest shareholder, hopes to push ahead with a new financing package.
The company’s newly expanded, seven-member board should help with efforts to refinance Integrated’s long-term debt, according to President Larry Anderson.
Integrated’s debt now stands at $83 million.
A new board member, retired Orange County judge C. Robert Jameson, was picked by Superior Court Judge Gregory Lewis earlier this month in an effort to break a board deadlock that had prevented Integrated from refinancing its debt.
Jameson will serve as a provisional director until a lawsuit filed by Integrated against Anil Shah, a company director, and the Orange County Physicians Investment Network, its majority shareholder, is concluded, the company said in a release.
Integrated spent $70 million in 2005 to buy Western Medical Center-Santa Ana, Western Medical Center-Anaheim, Chapman Medical Center in Orange and Coastal Communities Hospital in Santa Ana from Tenet Healthcare Corp.
Integrated’s debt ma-tured in March. Its debt payments amount to some $900,000 a month, according to a recent filing with the Securities and Exchange Commission.
The company is operating under a “forbearance agreement” that allows it time to refinance the debt while its lender, Medical Capital Corp. of Anaheim, doesn’t exercise its rights for 90 days.
The pact also blocks Medical Capital from removing Anderson or Chief Executive Bruce Mogel, Integrated’s top two executives.
If Integrated can’t refinance, restructure or retire debt or raise more money, “(our) status as a viable going business concern will remain in doubt and we may be forced to curtail or cease our operations or declare bankruptcy,” it said in the filing.
Integrated lost $20.5 million on net patient revenue of $350.7 million in the 12 months ended March 31. The company had a market value of $14 million at recent check.
In May, Integrated’s management sued Shah and the doctors’ network, which holds some 44% of the company, for breach of fiduciary duty and other charges.
A few days later, the Orange County Physician Investment then filed a separate suit against Integrated and said management issues need to be resolved before the debt can be refinanced, the filing shows.
In Integrated’s filing, it called the circumstances underlying the battle “a significant distraction” that “may have prevented (it) from pursuing a successful restructuring of its business and other profitable business opportunities.”
Meanwhile, regulatory filings show that Kali Chaudhuri, a Riverside physician, and William Thomas, a business associate of Chaudhuri, acquired a 36% share of Integrated by exercising warrants after Integrated defaulted on a debt.
Chaudhuri and Thomas got the warrants, which initially limited their combined stake in Integrated to 25%, two years ago when they withdrew a bid for Integrated.
Chaudhuri was Integrated’s original majority shareholder but eventually lost that role to the Orange County Physicians Network after lawmakers, regulators and doctors objected to his involvement in the deal.
Chaudhuri bought and later closed a chain of OC medical clinics earlier this decade, leaving some 300,000 people without healthcare and many doctors unpaid.
Regulators Clear Laser
Most of the recent news about Santa Ana’s Advanced Medical Optics Inc. has been dominated by a pair of big events: the voluntary global recall of its Complete MoisturePlus contact lens solution and its $4.3 billion takeover bid for rival Bausch & Lomb Inc.
In the meantime, the Food and Drug Administration approved Advanced Med-ical’s CustomVue Monovision Lasik eye-surgery laser that could eliminate the need for reading glasses for some people with poor eyesight that comes with age.
Regulators say that CustomVue is the first laser surgery device that can enable one eye to see objects far away and the other to see objects up close. The device was approved for use on people age 40 or over who have trouble seeing distant objects.
As part of the approval, the FDA is requiring Advanced Medical to study 500 patients who undergo surgery with CustomVue to make sure there’s no significant incidence of vision problems. Advanced Medical got CustomVue as part of its 2005 buy of Visx Inc., which was based in Santa Clara.
Bits and Pieces:
Eyeonics Inc., an Aliso Viejo maker of replacement lenses to correct the inability to focus up close, said its revenue for the quarter ended June 30 was up 88% to $8.1 million Cooper Cos. called us last week to kindly remind us that A. Thomas Bender is stepping down as chief executive later this year, but remaining chairman of the Lake Forest-based contact lens and women’s surgical equipment maker. A story in the July 9 edition implied that Bender would be retiring entirely from the company.
