Chaudhuri buys stake in O.C. hospital group

Riverside physician was forced to withdraw from IHHI bid two years ago because of earlier bankruptcy.
Dr. Kali Chaudhuri, who two years ago was forced to withdraw a bid to be majority owner of a group of four central Orange County hospitals, has exercised a warrant to buy a minority stake in the same company, Integrated Healthcare Holdings Inc.

According to a filing with the Securities and Exchange Commission on Thursday, Chaudhuri, a physician and entrepreneur based in Riverside, has acquired 39.7 million shares of IHHI, which makes him the company’s second-largest shareholder.

A group of Orange County doctors led by Dr. Anil Shah, a Santa Ana cardiologist, is the largest shareholder in IHHI with 59.1 million shares.

Larry Anderson, president of IHHI, said the company plans to disclose further details about Chaudhuri’s shareholding in a filing with the SEC on Monday.

Chaudhuri sparked opposition from doctors and regulators in 2005 because of his financial past. In 2000, a chain of clinics that he owned, KPC Medical Management, went bankrupt, stranding 300,000 patients without medical records and owing $400 million to creditors.

As part of his agreement to withdraw from the 2005 deal, Chaudhuri got a warrant to buy stock in IHHI starting in 2007.

Chaudhuri couldn’t be reached for comment today.

IHHI, which had a net loss of about $19.8 million in the 12 months through March, is beset by turmoil, with shareholders and management fighting in court for control of the company.

An Orange County judge has said he plans to rule July 11 on whether to order IHHI to call a special shareholders meeting to elect a new director to the board. A new director could break a 3 to 3 deadlock on the board that has prevented the company from refinancing its high-interest debts.

IHHI owns Western Medical Center-Santa Ana, Western Medical Center-Anaheim, Chapman Medical Center in Orange and Coastal Communities Hospital in Santa Ana.

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