Timberlands Departure Entangles HCHD Finances

Accounts Still in Use by Blackhawk

By Will Johnson
Messenger Reporter

HOUSTON COUNTY – During a meeting of the Houston County Hospital District (HCHD) Board of Directors on Tuesday, June 5, it was revealed two bank accounts are still in use by Rockdale Blackhawk, the parent company of Little River Healthcare and Timberlands Healthcare.

As the meeting got underway, HCHD administrator Dick Murchison informed the board members of three accounts at Prosperity Bank.

“Our one operating account has always been there. There are two other accounts that not only bear our EIN (employer identification number) number but they are known as the HCHD dba (doing business as) Houston County Medical Center. It has been brought to my attention that these accounts don’t belong to the district. They, through contract, were given to Timberlands,” he said.

He added he felt the HCHD Board should remove former HCHD President Deborah Porth Blackwell’s name from the operating account and put current HCHD President Dr. Bob Grier’s name on account.

“I encourage you to discuss with your attorney, when you go into executive session, what to do with those other two accounts. They are still operative and do bear your name. I would have some concerns about accounts that have your name on them,” Murchison said.

Grier explained they were taken over by contractual arrangements as “lock-box” type accounts for deposits and disbursement of funds.

Murchison said Grier was correct but cautioned the EIN of the HCHD was still on the two accounts.

As the discussion continued, board member Rhonda Currie-Brown said the two accounts in question had been identified in a Sept. 2017 audit and “… should have been taken care of after Sept. 30, 2017. It is large amounts of money that are being transferred from one account to another.”

Brown said Little River Healthcare currently fell under the umbrella of Rockdale Blackhawk and when Grier asked what she would recommend, she suggested freezing the accounts.

“I can’t say that is legal, but they owe us – the hospital district – money. They are running lots of big figures through there and it can’t be just this district. It can’t just be HCHD because there are sizable amounts of money. At the beginning of this year, there was over $500,000 in one account,” Brown said.

Dina Pipes, HCHD board member, added monies were being co-mingled and gave an example of rent from the Crockett Dental Clinic which had been deposited into one of the aforementioned accounts.

Grier said Timberlands had agreed in the original negotiations to take over the two accounts and keep the money coming in while paying the bills coming in.

Pipes remarked, “They kept the money coming in, but they didn’t pay the bills.”

HCHD Attorney Robert Spurck joined the discussion and said, “From a legal standpoint, there is no doubt that Little River or Timberlands hasn’t paid the bills they assumed contractually. My guess is to potentially get those accounts, we will need some type of judgement or legal action because those are funds related to the operation of a hospital and not the district.”

Spurck added, “Blackhawk is the whole reason this all happened – to shut the doors. The mother ship was close to filing bankruptcy and as part of their issue they were required to shed what they felt were non-money making aspects of the operation.”

Pipes said the corporate design of Blackhawk involved setting LLCs under LLCs “… so they could avoid being sued. One set of people are listed as the officers and managers of the same company. Blackhawk has the same people as Little River and Timberlands. All have the same people.”

“You can go into Oklahoma,” Brown said, “and they have the same bills as well. I don’t want to say it’s a scam because I don’t know that for sure but I would say that they have some type of deal going on where they are making money and we’re getting stuck with the bills.”

“The issue,” Grier said, “I think Robert spoke to that, is that when Timberlands, Little River or Blackhawk took over the contractual running of the hospital and they sent out a bill, that money coming back is their money. Although our name might still be on the account, I think we would be on thin legal ice if we went in there and took x amount of dollars for some of our expenses.”

Murchison brought up another concern as the discussion continued.

“I would say the more risky potential is if they wrote an insufficient check. In the banks eyes, these are the accounts of the HCHD. I would certainly close those accounts and they can re-open them in their names,” he said.

The possibility of legal action was brought up during the Blackhawk discussion and Spurck said he had been trying to find attorneys who would take on the case on a contingency basis.

Grier said the district simply didn’t have the money to pay a legal firm unless they took on the matter on a contingency basis. He said two firms had approached the HCHD about taking legal action against Blackhawk. Unfortunately, Grier said, they declined to take on the HCHD case.

“They said you can’t get past the corporate veil. You can’t get there. If you did receive a judgement, monies would move from one LLC to another and the chances of you getting any money and the chances of us getting our 40 percent contingency are approaching zero,” he said.

Spurck explained while there was no doubt Timberlands had breached the contractual agreement, he cautioned this might be a case of throwing good money at bad money and said it would not be wise to spend a $30,000 fee if Timberlands or one of its subsidiaries were to file bankruptcy.

 

Will Johnson may be contacted via e-mail at [email protected].