The accusations against St. Francis, in one timeline

TIMELINE ACCORDING TO CHSPSC

Here’s a timeline of alleged events, as laid out by CHSPSC LLC, in its lawsuit against St. Francis Hospital, Inc., filed on Friday in U.S. District Court, Middle District of Georgia, and made public late Tuesday:

November 2014: St. Francis announces it has an alleged “budget inaccuracy.”

Shortly thereafter: Pier Holcombe, an agent of CHSPSC, contacts Richard “Bo” Bradley, chairman of St. Francis’ board of directors, about potentially buying the hospital. A meeting is set for January.

Dec. 16: St. Francis and CHSPSC execute a confidentiality agreement.

Jan. 8, 2015: The two parties meet in the St. Francis boardroom for more than two hours. Ken Hawkins, CHSPSC’s senior vice president of acquisitions and development, asks whether St. Francis has any significant legal or regulatory problems. St. Francis representatives say its crisis was the result of an “accounting error” evidencing incompetent financial management.

Jan. 15: The Ledger-Enquirer reports that St. Francis has entered exclusive discussions with Piedmont Healthcare, a competitor of CHSPSC, in regards to a possible sale of the hospital.

Jan. 22: Bradley confirms the news to Holcombe and says CHSPSC would be St. Francis’ “next choice” if the negotiations with St. Francis fail.

March 3: Bradley calls Holcombe and explains that St. Francis has terminated negotiations with Piedmont. He says talks failed solely because Piedmont was unwilling to assume St. Francis’ debt. He says St. Francis wants to renew negotiations with CHSPSC.

March 12: CHSPSC meets with St. Francis and again asks for more details about the “accounting error.” St. Francis representatives deny knowledge of legal or regulatory problems. Both parties agree to pursue negotiations in earnest. CHSPSC provides St. Francis with a list of due diligence materials. St. Francis agrees to upload the documents to a “data room” starting the next day.

Late March to April: Eric Roach, CHSPSC’s vice president of finance, on multiple occasions asks Greg Hembree, St. Francis’ CFO, to describe the hospital’s relationship with HUD. Hembree says HUD has weekly calls with St. Francis but doesn’t mention the audit.

April 9: St. Francis and CHSPSC execute a Letter of Agreement for CHSPSC’s proposed acquisition of St. Francis. CHSPSC pays an initial deposit of $5 million “to cover St. Francis’ cash flow deficiencies.” It will be applied to the purchase price at closing. If the transaction does not close, St. Francis will be required to return the $5 million.

April 27: CHSPSC puts a project CFO, Jeff Mullis, on site at St. Francis to assist with collecting due diligence materials.

May 6: Matt Pierce, CHSPSC’s senior director of compliance, asks whether there are any compliance matters, settlement agreements or government investigations that St. Francis hasn’t disclosed. 

May 23: St. Francis board member Phillip Thayer calls CHSPSC to claim that Mullis is “disruptive” and to demand that Mullis leave the hospital.

June: CHSPSC realizes that St. Francis had been potentially violating Medicare and HUD regulations for a number of years and that the violations could expose St. Francis to tens of millions of dollars in liability in the event of a government action or a whistleblower lawsuit.

June 22: St. Francis emails Hawkins to say that the hospital has provided “all requested information.”

June 26: CHSPSC asks St. Francis to provide a detailed update on the status of its HUD loans and summarize all recent communications with HUD.

June 30: A group from St. Francis travels to Brentwood, Tenn., to meet with CHSPSC, which inquires about the regulatory violations it has uncovered and insists that the sale will not close unless St. Francis voluntarily discloses the violations to federal authorities. St. Francis asks for an additional $3 million deposit.

July 10: John Bodine, St. Francis’ financial consultant, calls Hawkins and informs CHSPSC of the HUD-OIG audit for the first time.

July 14: St. Francis uploads the Jan. 7 HUD-OIG audit letter to the due diligence data room.

July 15: St. Francis board member Paul Todd apologizes repeatedly to Hawkins and in-house legal counsel for St. Francis’ failure to disclose the audit. St. Francis retracts its offer to give CHSPSC a copy of the HUD-OIG audit, saying HUD advised St. Francis it could not be shared.

July 20: CHSPSC informs St. Francis that the acquisition cannot go forward without assurances from HUD that CHSPSC would not be affected by the investigation.

July 21: St. Francis responds with a letter terminating the Letter Agreement.

This story was originally published August 12, 2015 at 9:46 AM with the headline "The accusations against St. Francis, in one timeline."