13 September 2009
Where did the money go? Part 2
13/09/09 09:52
The Receiver appointed to oversee the Medical Capital assets and operations issued another interim report this week, and the news is not promising.
First, while some investors believed that the core focus of Medical Capital’s business was factoring (buying receivables at a discount), the Receiver reported that: “in recent years, Medical Capital acted primarily as a lender.” Many of the loans are in default, and one of the hospital organizations to which Medical Capital loaned money claims that Medical Capital actually misappropriated $12 Million. They have asked the court for permission to file suit to recover those monies.
Second, the Receiver’s news concerning the status of the receivables wasn’t promising either. He broke the receivables down into two groups “verifiable” and “non-existent.” The verifiable outstanding receivables made up roughly $80 Million, 13% of the receivables on Medical Capital’s books. Of those, only $6 Million were less than 180 days old. Almost $543 Million of the receivables were reported to be “non-existent,” meaning that they related to accounts that no longer existed, had a negative balance, or the collateral had transferred to term loans.
In short, the Receiver has reported that Medical Capital raised almost $1.8 Billion from investors, took $268 Million in “administrative fees,” and still owes $1.079 Billion to investors. As of September 5, the Receiver had a net of $2.5 Million collected before paying any professional fees.
What is clear is that it is going to take the Receiver a considerable amount of time to sort through Medical Capital’s book and records, and even longer to bring the entire matter to a close.
Is this where you thought your Medical Capital investment was going? If not, then call us at 888 999 9396, or send an email.
If you would like to read older posts, please click on the archive links to the right. To return to this entry, hit the “back” button on your browser.
First, while some investors believed that the core focus of Medical Capital’s business was factoring (buying receivables at a discount), the Receiver reported that: “in recent years, Medical Capital acted primarily as a lender.” Many of the loans are in default, and one of the hospital organizations to which Medical Capital loaned money claims that Medical Capital actually misappropriated $12 Million. They have asked the court for permission to file suit to recover those monies.
Second, the Receiver’s news concerning the status of the receivables wasn’t promising either. He broke the receivables down into two groups “verifiable” and “non-existent.” The verifiable outstanding receivables made up roughly $80 Million, 13% of the receivables on Medical Capital’s books. Of those, only $6 Million were less than 180 days old. Almost $543 Million of the receivables were reported to be “non-existent,” meaning that they related to accounts that no longer existed, had a negative balance, or the collateral had transferred to term loans.
In short, the Receiver has reported that Medical Capital raised almost $1.8 Billion from investors, took $268 Million in “administrative fees,” and still owes $1.079 Billion to investors. As of September 5, the Receiver had a net of $2.5 Million collected before paying any professional fees.
What is clear is that it is going to take the Receiver a considerable amount of time to sort through Medical Capital’s book and records, and even longer to bring the entire matter to a close.
Is this where you thought your Medical Capital investment was going? If not, then call us at 888 999 9396, or send an email.
If you would like to read older posts, please click on the archive links to the right. To return to this entry, hit the “back” button on your browser.