A New Jersey insurance company has won a bankruptcy court auction to buy Universal Health Care for $33.25 million and plans to recapitalize the troubled St. Petersburg Medicare provider.
But the deal with CarePoint Insurance faces both regulatory and legal hurdles as Florida insurance regulators move ahead with a bid to seize control of Universal. A hearing to potentially liquidate Universal and appoint the state as receiver is slated for March 21 in Tallahassee.
Attorneys representing Universal and CarePoint are trying to finalize the sale within a couple of weeks.
Harley Riedel, a Tampa attorney representing Universal in bankruptcy proceedings, said it's possible that the closing could take place in advance of the liquidation hearing. Or the state may agree to a consent order that gives Universal time to recapitalize.
"There will be discussions with the regulators," he said.
Earlier this week, the Florida Office of Insurance Regulation said any Universal bidder approved by the bankruptcy court would need regulatory approval. "We would expedite our review process, given the circumstances," agency spokeswoman Amy Bogner said.
Universal has nearly 1,000 employees — most of them in its St. Petersburg headquarters — who have been in limbo since regulators last month deemed the company nearly insolvent and accused executives of a broad pattern of financial mismanagement under founder and chief executive officer A.K. Desai.
Florida Insurance Commissioner Kevin McCarty, in seeking to liquidate Universal, said the company has been victimized by fraud, forgery, embezzlement and other illegal conduct. The state has refused to disclose details of some of the allegations, however, saying the documents are protected from public disclosure as part of an ongoing investigation.
Desai could not be reached for comments.
Universal members have continued to receive coverage through their plan throughout the ordeal, but they have the option of contacting their agent to consider alternatives, state regulators have said.
Representatives of CarePoint declined to comment on their plans Friday, deferring until a formal announcement of the acquisition is released.
Jeff Harrington can be reached at [email protected] or (727) 893-8242.