Replace: This case was resolved on Sunday night by way of a settlement, so the trial by no means occurred. The attorneys representing Hernandez advised MedCity Information that he categorically denies the allegations.
Former Cano Health CEO Marlow Hernandez is going through a jury trial this week over allegations of fraud and corruption. The trial, set to start on Monday, will look at claims that Hernandez used his place to illicitly enrich himself and his household — actions the plaintiffs say helped drive Cano out of business.
This would be the first time Hernandez has confronted trial for his alleged misconduct at Cano, which he based in 2009.
The Miami-based firm is a senior-focused major care supplier that went public in 2021 by way of a $4.4 billion SPAC merger. Final 12 months, it filed for Chapter 11 chapter. This submitting got here lower than a 12 months after three of Cano’s board members publicly resigned in protest of its governance technique. They left in March 2023, when the corporate’s inventory had dropped 80% in 12 months.
Most business consultants reacted to the chapter submitting without surprise, believing it to be a direct results of mismanagement, poor market choice and a quixotic development technique.
The plaintiffs within the trial Hernandez is going through this week — Onsite Dental and its subsidiary CD Assist — are looking for over $72 million in damages.
They allege that Hernandez made a number of fraudulent misrepresentations that led them to enter into two main enterprise offers — the sum of which totaled greater than $30 million.
In response to the grievance, Cano was speculated to accomplice with Onsite to open dental clinics inside Cano’s major care amenities — in addition to pay the corporate assured month-to-month charges totaling a whole bunch of tens of millions of {dollars} over twenty years.
Hernandez advised Onsite that Cano was increasing its value-based care choices to incorporate dental companies and that he wished a accomplice to assist scale these operations nationally, stated Joe Mamounas, one of many attorneys representing the plaintiffs.
The plaintiffs allege that Hernandez lied about key information, together with Cano’s monetary well being, inner approval of the contracts and compliance with healthcare rules. They are saying these misrepresentations precipitated Cano to later cease paying greater than $5.5 million in invoices.
Their lawsuit accuses Hernandez of fraud, negligent misrepresentation, misleading commerce practices, and unjust enrichment for deceptive enterprise companions after which personally benefiting from the association.
They declare they poured tens of millions of {dollars} into staffing, tools and infrastructure to launch Cano-branded dental clinics, just for Cano to immediately cease paying its invoices. As a result of their settlement assured fastened month-to-month funds, that halt in funding allegedly worn out their money circulate and compelled them to close down operations, lay off staff and abandon dozens of clinics in the midst of constructing them.
In response to discovery, Hernandez allegedly used the Onsite Dental deal to “line his and his spouse’s pockets,” Mamounas acknowledged.
Hernandez didn’t reply to MedCity Information’ request for remark by the point of this text’s publication, however in courtroom filings has denied the allegations.
Picture: tiero, Getty Photographs
