Friday, October 16, 2009

Medical Capital Attempts to Sell Assets after Fraud Allegation

Medical Capital Holdings, the California health finance company facing allegations of fraud by the Securities and Exchange Commission (SEC) has negotiated a tentative deal to sell its interest in Integrated Healthcare Holdings of Santa Ana, California.

In a monthly report to U.S. Judge David Carter, the court appointed receiver for Medical Capital, Thomas Seaman, stated that Integrated Healthcare's interest is valued at $81.4 million under three separate agreements. Under the deal, all three of them would be sold for $55 million.

Integrated Healthcare has asked for the court's permission to sue Medical Capital for breach of contract when Medical Capital defaulted on a $12.7 million financing commitment to Integrated, putting its four area hospitals at risk. Integrated owns Western Medical Center-Santa Ana, Western Medical Center-Anaheim, Coastal Communities Hospital in Santa Ana, and Orange County's Chapman Medical Center.

A letter of intent to sell Medical Capital's interest in Integrated Healthcare is expected in the next few days.

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