With a room full of creditors — including former employees — looking on, the new leader of the shuttered People's Community Health Center described plans on Wednesday to relaunch clinics as the nonprofit tries to work its way out of bankruptcy.
"I believe I can turn it around. I know I can do it. It's just a matter of, do I have the opportunity?" Baltimore County businessman William A. Green said during a meeting of creditors in federal bankruptcy court.
People's abruptly shut down its five clinics last summer amid mounting financial problems, leaving employees without jobs and low-income patients in Baltimore City and Anne Arundel County without medical care.
Green tried to resuscitate People's but filed for Chapter 11 bankruptcy reorganization in January, listing millions of dollars of debt owed to the government, mortgage companies, banks, suppliers and former workers.
In court records, People's counts $3 million in assets — most of it properties it owns in Baltimore City and Anne Arundel County — against $6.7 million in liabilities.
People's list of debts is lengthy, including $660,000 owed to the Internal Revenue Service, $535,000 owed to the state comptroller, $117,000 owed to GE Healthcare and nearly $66,000 owed to Baltimore City for property taxes. The company's properties are encumbered by $2.1 million worth of liens.
Other creditors include companies that provided medical equipment, a health care staffing agency, lawyers, an accountant, a landscaper, an exterminator, banks, utilities and employees.
"Who are the creditors? Give me the Yellow Pages," Green said.
In addition to creditors, a federal agency that gave grants to People's wants $2.25 million of its money back unless People's can account for the way the money was spent.
People's does have a little money coming in. It gets about $55,000 per month from a managed care organization that it partially owns. That organization also is trying to collect about $100,000 in unpaid bills, Green said.
Green outlined plans to relaunch some nonprofit clinics to restart a cash flow to pay back People's debts. The clinics wouldn't rely on federal grants as People's did; rather, they would rely on insurance payments from patients as their main revenue source, he said. He didn't say which clinics would reopen or when.
In the coming months, Green is required to file a detailed plan with the court, and creditors will have the opportunity to weigh in on it before a judge decides whether to accept it.
Barbara Einzig, who was a grants specialist for People's before losing her job, is unconvinced Green's plan will work. If People's couldn't work as a federally qualified center — which received millions in grants and had government oversight — Einzig questioned how it would be viable without grants.
"I think it would be a disservice to community health for People's Community Health Center to reopen," she said after the bankruptcy meeting.
Noelle Lang said she was never paid for 21/2 months she worked at People's, and wonders if the company will pay employees as part of the bankruptcy process. She noted Green has asked the court for permission to use People's cash flow to pay his company, Enterprise Development Corp., a management fee.
"It's frustrating," she said. "How do you sit in that office all day and not have a plan to pay employees back?"
During his testimony, Green said he didn't believe previous leadership of People's misappropriated or misspent money. Rather, he said, things were "done weird," including having numerous bank accounts with many transfers between them, and payroll that was too high.
He said when People's initially faltered, leaders applied for more grants.
Former managers of People's are gone; the only carryovers are members of the board of directors, Green said. Under Green's management last year, People's briefly changed its name to MedHealth of Maryland and became a unit of a newly created for-profit MedHealth Cos.
Green said the name has since been changed back.
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