HOBOKEN – Donald Scarinci, the general counsel for Hoboken University Medical Center from 2009 until July 16, 2011, resigned because he feared the Hoboken Municipal Hospital Authority, a city board, was committing fraud by engineering a bankruptcy of the hospital, according to a report citing court filings in the Star Ledger.
Scarinci said in court papers that the HMHA withheld millions in contractual payments to force a bankruptcy, according to the report.
When asked by the Reporter in late August if the HMHA withheld payments from the hospital’s management board, Hudson Healthcare Inc., spokesperson Doug Petkus denied the claim.
“HMHA did not withhold funds from HHI,” Petkus said in an e-mail to the Reporter last month. “HMHA has no independent source of revenue other than what the hospital itself generates. Funds generated from the hospital are used to satisfy the terms of the bonds and then the balance is distributed to HHI to operate the hospital.”
Petkus reiterated his stance in the Ledger report on Wednesday, and is quoted as saying the authority believes the accusations by Scarinci in court are “unfounded and false.”
The financial debts must be settled before the sale of Hoboken University Medical Center to a group that also owns Bayonne Medical Center is complete, and a bankruptcy could quickly settle the claims.
The authority is also awaiting a final approval from the state Commissioner of Health, who must issue a Certificate of Need before the transfer of ownership is complete.
Mayor Dawn Zimmer, a member of the HMHA, has said she would like to sell the hospital to a private buyer to keep the hospital open and relieve taxpayers of a $52 million bond guarantee that was made by the city after they stepped in to save the hospital from closure in 2007.
The hospital owes creditors $34.6 million in unpaid bills, and is hoping to pay out approximately $5 million of those claims, according to the report. Scarinci’s law firm, Scarinci & Hollenbeck, is among the creditors.
For previous coverage on the bankruptcy from the Reporter, click HERE. — Ray Smith
Former hospital attorney resigned because he thought city board committed fraud, report says
