Former Nu-Med CEO forms firm, buys hospitals: Marylander takes over Sherman Oaks, West Valley centers.Former Nu-Med CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. forms firm, buys hospitals The former chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of the for-profit hospital For-profit hospitals, or alternatively investor-owned hospitals, are investor-owned chains of hospitals which have been established particularly in the United States during the late twentieth century. chain Nu-Med Inc. - Stuart Marylander, now chief executive of the newly formed Triad Healthcare Corp. - has borrowed $142 million, guaranteed by state taxpayers, and purchase two profitable Southland hospitals from his old employer. Some observers charge the March buy-out amounts to a bailout bailout The financial rescue of a faltering business or other organization. Government guarantees for loans made to Chrysler Corporation constituted a bailout. for the Encino-based Nu-Med, which is reeling under the weight of industry contractors and junk-bond debt. But others say the deal is good for the Southland hospital system. No doubt, the publicly held Nu-Med could use the money: It has reported net losses for four straight fiscal years, including a $7.2 million setback on revenues $278.0 million in fiscal 1990, ended April 30. In the first three quarters of fiscal 1991, Nu-Med reported a loss of $5.9 million on revenues of $188.0 million. Marylander's nonprofit Triad Healthcare, based in Sherman Oaks, bought the two hospitals - the 156-bed Sherman Oaks Community Hospital and the 139-bed Nu-Med Regional Medical Center-West Valley - after issuing $142 million in bonds guaranteed by the California Health Facility Construction Loan Insurance Fund, a state fund. Marylander could not be reached for comment on the transaction and Nu-Med declined to comment. The state fund was established in 1968 to help nonprofit hospitals and its backing allowed Triad to borrow money at a low interest rate. The staff of the state Insurance Fund initially argued against guaranteeing the bonds, finding that the Triad-Nu-Med deal did "not appear to be an arm's length transaction Arm's Length Transaction A transaction in which the buyers and sellers of a product act independently of each other and have no relationship to each other. Notes: Such a transaction is absent of any pressure sales tactics or relationships among the various parties. ." The staff added that the security, or collateral, provided on the bonds "appears to be inadequate compared to the magnitude of the risk in the program." The staff's stance was reported in the San Francisco Examiner The San Francisco Examiner is a U.S. daily newspaper. It has been published continuously in San Francisco, California, since the late 19th Century. History 19th century The beginning of the Examiner is a topic of some controversy. newspaper. However, Phil Perry Phil Perry (born in East St. Louis, IL on January 12, 1952) is an R&B musician and a former member of The Montclairs. The Montclairs left Paula and disbanded in 1975. Perry later teamed with Richard Sanlin in a duo that had a short stay at Capitol in 1980. , assistant director of the Office of Statewide Planning and Development, said the staff came around and ultimately supported state backing of the Triad bonds, which were issued in March. "They went down and looked at the hospitals," said Perry. The hospitals needed to be sold by Nu-Med, added Perry. "You look at Nu-Med going down the toilet. They were taking profits taking profits See profit taking. out of Sherman Oaks to support the rest of the company," he said. "They had to sell it to get their money out of it." The Insurance Fund was Triad's second try at getting state aid for the buyout of the two hospitals. In October of last year Triad informally asked the California Health Facilities Financing Authority, a separate state agency that issues tax-exempt bonds Tax-exempt bond A bond usually issued by municipal, county, or state governments whose interest payments are not subject to federal and, in some cases, state and local income tax. tax-exempt bond See municipal bond. for hospital financing. Triad was rebuffed and never formally asked the agency for help. A board member of the Authority was quoted in the Examiner article as saying the Trial deal appeared to "bail somebody out that got stuck with some junk bonds." Whatever the situation with Nu-Med holders of junk bonds, some local hospital industry denizens favored the deal. "I think it is a good deal. Those hospitals (Sherman Oaks and Nu-Med Regional) needed an infusion of new blood," said David Langness, spokesman for the Hospital Council of Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, , a trade group of Southland hospitals. "The taxpayers aren't financing this (only guaranteeing the bonds) and the community derives benefits." Both hospital have emergency rooms - which not all hospitals do - while Sherman Oaks Community has excellent and somewhat rare facilities for burn victims and Nu-Med Regional is known for its treatment of AIDS patients, added Langness. |
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