Alaris accuses CarePoint owners of embezzling millions as hospitals continued to lose money

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In the latest round in the ongoing feud between Alaris Health and CarePoint Health, the owner of Alaris accuses the owners of the Hudson County hospitals of embezzling millions from the company – even as they continued to fall deeper into debt.

By John Heinis/Hudson County View

“Christ Hospital presently shows outstanding debts and liabilities on its balance sheet of approximately $30 million — the same amount of money withdrawn by the [owners] for fictitious management fees to Sequoia Healthcare between 2013 and 2016,” Avery Eisenreich said in a counterclaim filed with the Delaware Chancery Court on January 15th.

Eisenreich, the owner of Alaris and a 25 percent owner of Christ Hospital, has been accused of holding up CarePoint’s Jersey City and Hoboken hospital sales with Robert Wood Johnson Barnabas Health – as well as of trying to convert the Bayonne Medical Center into a nursing home.

His counterclaims to the December 10th lawsuit filed by CarePoint reveal some more details first alleged in by the New Jersey Commission of Investigation’s report into the hospitals practices.

The report found that the owners received $157 million in management fees from their Hudson County hospitals via a handful of limited liability companies that they own a majority stock in.

Eisenreich echoes some of the language in the SCI report, noting that the management companies “were embezzling from the hospitals” and were created to disguise such improprieties.

In separate filing made on the same day, attorneys for Alaris asks for CarePoint’s complaint to be dismissed since Eisenreich’s purchases of the land occupied by the BMC and the Hoboken University Medical Center dud nothing to impede with the hospital negotiation sales.

“The transactions at issue, are not related (as Plaintiffs suggest), but, are distinct,” a motion for judgement says.

“Avery Eisenreich’s purchase of the Hoboken and Bayonne Real Estate and offer to purchase MPT TRS’ interest in HUMC Opco has nothing to do with, and does not in any way implicate, affect or interfere with any promises Plaintiffs allege were made by Avery Eisenreich.”

After initially declining to comment on ongoing litigation, CarePoint spokesman Dapa Wilcox called Eisenreich’s counterclaims “frivolous” and “desperate.”

“CarePoint’s goal is to ensure that the hospitals remain open and it has been working tirelessly to further the sale process notwithstanding the conduct of Mr. Eisenreich. While we cannot comment on an ongoing legal matter, the claims filed by Mr. Eisenreich in response to the claims against him are frivolous and a desperate attempt to distract from his wrongful conduct,” he told HCV.

“It is worth noting that as the SCI recognized last year, Hoboken Hospital, Christ Hospital and Bayonne Medical Center were bankrupt hospitals ‘and could have closed if not for the actions, including investments and assumption of pre-existing liabilities, by the CarePoint Health hospitals’ ownership in acquiring and improving the hospitals.'”

In addition to seeking the CarePoint complaint to be dismissed, Eisenreich is pursuing damages from the court to be compensated for the monies the CarePoint owners withdrew from the hospital.

In the midst of the BMC’s future still uncertain, along with Christ Hospital according to CarePoint’s court filing, Gov. Phil Murphy (D) has signed bills introduced by Assembly members Nick Chiaravalloti and Angela McKnight (D-31) seeking more hospital financial transparency into state law.

 

Editor’s note: This story has been updated with a comment from CarePoint spokesman Dapa Wilcox. 

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