Ralph de la Torre MD hasn’t sailed the $40 million boat south yet–but he doesn’t have to go into his office anymore, only the lawyers’. Yesterday (30 September), Dr. de la Torre stepped down from his CEO and board positions of the bankrupt Steward Health. He had submitted his resignation on 19 September, the day that the Senate Health, Education, Labor and Pensions (HELP) Committee voted to hold him in criminal and civil contempt due to his failure to appear before the committee on 12 September. The full Senate voted to refer the contempt charges to the Department of Justice (DOJ) on 25 September. [TTA 26 Sept]
de la Torre filed his own lawsuit on 30 September in the District of Columbia US District Court against each member of the HELP Committee, charging them with violating his Constitutional rights, specifically the Fifth Amendment on self-incrimination, in seeking to subpoena him for a hearing which “was simply a device…to attack Dr. de la Torre and publicly humiliate and condemn him” as part of a “coordinated campaign to villainize and scapegoat him.” The lawsuit seeks to have the subpoena and the contempt referral invalidated and declared unenforceable as a result, seeking declaratory and injunctive relief. He had previously asserted his Fifth Amendment rights before the Committee in view of the company’s Chapter 11 proceedings. Given the threatening and extreme language of several of the committee Members and the actions that de la Torre’s filing singles out, the DC District Court hopefully will give this a fair hearing.
It is unknown if anyone will replace de la Torre as CEO even on an interim basis, as the company is selling its assets via the US Bankruptcy Court for the Southern District of Texas.
“While Dr. de la Torre has amicably separated from Steward on mutually agreeable terms, he will continue to be a tireless advocate for the improvement of reimbursement rates for the underprivileged patient population,” a Steward spokesperson said to Becker’s in a 28 September statement. “Dr. de la Torre urges continued focus on this mission and believes Steward’s financial challenges put a much-needed spotlight on Massachusetts’ ongoing failure to fix its healthcare structure and the inequities in its state system.” (Our Readers will not be blamed for being slightly amazed at this last statement, as most of Steward’s troubled hospitals, including two hospitals that no one would buy, were in that state–and Steward’s interests ranged all the way to London and Malta.) FierceHealthcare, Healthcare Dive
She’ll do it herself, because nearly 50% of voting shares says she can–No Third-Parties Need Apply. Per an SEC regulatory filing yesterday (30 September), beleaguered 23andMe CEO Anne Wojcicki declared that she is no longer seeking proposals from third parties and is moving forward to acquire the company. “It has become even clearer to me that the best path forward for the (company) is for me to take the company private.” Since the board of directors is vacant–except for her–and she holds effective voting control, it is hard to contradict her. While the company is public via a SPAC that cracked hard, with shares hovering around $0.37, her $0.40 bid per share was rejected by the board in no uncertain terms. However, Wojcicki is the only one who counts here, as she has sole voting power over 9.7 million shares and shared voting power over 101.1 million shares of the company equaling 24.8% of the company’s shares. Replacements have not been made for the seven departed independent directors–and this Editor doesn’t expect any until (and if) Wojcicki buys the company [TTA 17 Sept].
In the SEC filing, Wojcicki said “Importantly, I remain committed to our customers’ privacy and pledge to maintain the (company’s) current privacy policy in effect for the foreseeable future, including following completion of the acquisition I am currently pursuing.” This Editor ironically notes that had that position on site and database security prevailed a year or so ago, none of this would have happened.
Wojcicki may be buying a near-empty shell of a company that preferred to blame users versus clean up its security act, but it will be All Hers. There you go. Reuters, The Business Journals, Yahoo News
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