Closing a Medical Business Before Malpractice Gets Out of Hand

[healthhelp]

My question involves malpractice in the state of: California

This also includes a business law along with medical/legal malpractice.

I found out a week ago that a person without a medical license cannot be a shareholder or be a director (?) or own a medical practice. Before this, I did not know. An investor approached me, a licensed medical provider, to open a practice together. I would be the CEO on paper, and he, as the investor would be the CFO and technically run and own everything. There were some things that should not have been done. They were done because of pressure from the CFO to make money/stop the delay of payments. Due to the security of my job, and pressure from the CFO, I had him sign that he would take responsibility for all the things I shouldn't be doing (therefore, I realize I was admitting I knew I shouldn't have done these things but did anyway).

After increasing disagreements and pressure, I told him I didn't want to do this anymore. I gave my written notice that I'm stepping down as CEO. However, he doesn't want to close the business (city business, secretary of state, and bank account). He was also running out of money, paying me and other employees late. On my last day, I took out the pay I had worked from the bank. When I told him, of course, he was upset and told me this was illegal, whether I was CEO or not. But he said as long as I let him keep the money from the patients I treated, he won't do anything. He threatened that if I don't, he won't pay the employees and I'd be responsible as the CEO.

He owns all the shares to the company and on paper, is on all the documents. I recently took myself off the SOS website as CEO, started the process to close the city business license, but have not yet closed the bank account. There is an outstanding from one of the insurance companies who made a mistake with the billing. The CFO said he will not pay it if I close the account. I have thought to close the bank account, do a USPS change of address to receive the check to pay the insurance company, and close everything. I'm not sure if this is the best thing to do or steps to take.

There is nothing on our contract that I had broken, except the 2 weeks notice of my resignation. I did tell him I'll keep the bank account open for 2 weeks, but he demanded I keep it open for 2+ months if needed, for all the money from the claims. There is nothing in the contract about bank accounts and who is responsible for paying other employee wages. The CFO pays everyone, including myself.

He has mentioned about getting a lawyer, but I'm not sure what he'd try to do to me as I believe he'd be incriminating himself. I'd like to just close everything, stop his threats, and not take this to court for his and my own sake.

My questions:
-Any advice would be appreciated on how to close everything without prolonging/delaying and smoothly.
-Was it illegal for me to withdraw money from the bank?
-Does he have any grounds to sue me or threaten me?
-Any comments/concerns about the malpractice that I was a part of or aware of from the pressure the CFO was giving?
-How should I approach the CFO? What should I say to him to make him stop his threats?

Thank you very much for your time and input.

[flyingron]

If you are not a shareholder, you can resign as an employee (or whatever position you have) and walk away. Your liability is limited to the actions you took while you were an employee there. If you are not a medical provider, you have no concerns about patient responsibility. If you were authorized to draw your pay from the bank before, you were authorized to do it when you resigned. Even if not, you were probably OK as long as you can show it is money you were entitled to as wage.

He can always threaten to sue, it's easy to do. He can actually sue, which is slightly harder. He likely isn't going to prevail absent some enforceable contract (not seeing that here).

[healthhelp]

The issue is, he won't take the initiative to remove me from the documents and business as he needed me in the first place. In that case, could I just close everything myself without any issues? What about the medical claims reimbursements that need to be done based on the billings I've done and the patients I've seen? Since I'm the CEO and the medical provider, with the insurance companies connected by name and license, wouldn't I be liable for them if he's using that to hold on to me?

Thank you for your response.

[budwad]

Realistically, how could anyone on this forum be able to answer these questions for you? These are questions that you should be asking a business attorney about what you should do and what exposure you may have with respect to your license and care to patients, what your exposure is to claims reimbursement, and the bank account.

As far as I can see, and I agree with ron, that you were nothing more than an employee. You don't own any part of the practice.

What documents do you want to be removed from?

Walk away and let your investor deal with the problems. If the other shoe drops later, you deal with it.

[llworking]

Realistically, how could anyone on this forum be able to answer these questions for you? These are questions that you should be asking a business attorney about what you should do and what exposure you may have with respect to your license and care to patients, what your exposure is to claims reimbursement, and the bank account.

As far as I can see, and I agree with ron, that you were nothing more than an employee. You don't own any part of the practice.

What documents do you want to be removed from?

Walk away and let your investor deal with the problems. If the other shoe drops later, you deal with it.

I think that he should talk to an attorney before he walks away. The whole situation makes me a bit uneasy. I agree that eventually walking away is what he needs to do. I just that he needs an attorney to make sure that he does it in an orderly fashion.

[bcr229]

If you were an employee, you have resigned, and you have filed with the Secretary of State to remove yourself as CEO as you stated above, I don't see where you would have the authority now to close bank accounts or terminate business licenses.

I agree that you need to stop what you are doing and take your questions to a local business attorney.

[adjusterjack]

The issue is, he won't take the initiative to remove me from the documents and business as he needed me in the first place. In that case, could I just close everything myself without any issues? What about the medical claims reimbursements that need to be done based on the billings I've done and the patients I've seen? Since I'm the CEO and the medical provider, with the insurance companies connected by name and license, wouldn't I be liable for them if he's using that to hold on to me?

Thank you for your response.

You got into this deal without a lawyer, now you'd better get one because nothing you do prevents you from being NAMED in a lawsuit, or being held liable if everybody else goes belly up.

What you should have spent on a lawyer at the beginning was $.
What you may need to spend on a lawyer now might be $$.
What you will spend on a lawyer if you get sued is $$$$$$$$$$$$$$$$$.

[ellaavery]

yes you have to close