Legal battles over Merced Health Clinic ramp up. Clinic files for bankruptcy

Representatives of Horisons Unlimited Health Care, a nonprofit health clinic whose board members have been involved in a series of legal battle since March, are set to appear in court Friday in Fresno after filing for Chapter 11 protection earlier this week.

Some representatives of the clinic filed a petition for reorganization under federal bankruptcy code on Wednesday, according documents filed in Merced County Superior Court.

Horison clinics located throughout Merced, Mariposa, Madera and Stanislaus counties are not closing and will be continuing to serve patients, confirmed Aaron Dyer, a Los Angeles-based attorney representing Horisons.

The bankruptcy filing “.. .is not a step towards closing the clinics operated by Horisons, but was taken to allow Horisons to continue to operate under the protection of the bankruptcy court,” Dyer said in an email to the Sun-Star.

He added: “The goal of this filing is to preserve the public trust, protect Horisons’ assets, and to ensure that Horisons can continue its mission to provide compassionate care to the underserved communities of Merced and the surrounding counties.”

The eight clinics offer a variety of medical, dental and chiropractic services, and will have a new clinic coming to Riverbank, according to its website.

On Wednesday, a hearing was scheduled in Merced Superior Court at 10 a.m. to discuss the allegations in the lawsuit filed on March 24 by eight Horison board members against the clinic and other board members, including the board chairman, Luis De La Cruz.

The suit filed by eight board members alleges “a renegade group of board members” wrongfully seized control of the board and “began squandering Horisons Unlimited’s assets by ... voting to make large expenditures and improperly giving large raises, bonuses and benefits to various employees.”

The bankruptcy filing halted any legal proceedings and they will now be handled in the United State Bankruptcy Court in Fresno.

Adam Miller, one of the lawyers representing the eight board members, said he suspects the bankruptcy filing was a tactical move to avoid the hearing.

“Most likely the bankruptcy filing was improper itself and that will need to challenged,” Miller said in a phone interview with the Sun-Star. “We’re still determining what we’re going to do next but we’re almost certain we’re going to be challenging the bankruptcy.”

Dyer said the claims that the defense filed bankruptcy to avoid the hearing were “absurd.”

“This is an action to protect the assets of Horison and is motivated by a desire to carry out its mission in continuing to provide care, so that the ongoing litigation and other issues don’t interfere with that,” Dyer said.

The bankruptcy filing is the most recent legal action Horisons has taken since the start of a series of legal battles that began with the suit filed by Horisons on March 3 against their former CEO, Sandra Haar, and her family. The suit alleged Haar and her family engaged in misconduct that allowed her and her family to financially profit from the clinic.

This story was originally published May 11, 2017 at 5:51 PM with the headline "Legal battles over Merced Health Clinic ramp up. Clinic files for bankruptcy."