A spinoff entity tied to the company that landed Alabama’s $1 billion prison health care contract has filed for Chapter 11 bankruptcy in Texas.
Corizon filed the case Monday in the United States Bankruptcy Court for the Southern District of Texas, Houston Division.
Corizon, which had prison healthcare contracts all over the United States and a growing mountain of debt, took advantage of Texas law to break into two companies, leaving Corizon with most of the problems and debt and the other company, CHS TX, with a clean slate and almost all of the employees, contracts and assets. CHS TX also retained all Corizon executives, including new CEO Sara Tirschwell. A few months later, another company controlled by Tirschwell, YesCare, bought CHS TX and began operating under the YesCare name.
However, it appears it will move forward without Tirschwell as CEO.
Sources told APR that Tirschwell has been replaced, and while the company did not respond to questions about her possible ouster, the YesCare website now lists Jeffrey Sholey as Chief Executive Officer. Tirschwell was still the CEO as recently as last week, as she provided a statement to APR in that capacity.
Corizon’s history of bankruptcy and allegations that the company failed to make payments to third-party vendors and insurance companies are one of multiple factors that led the Alabama Legislature’s Contract Review Committee to put a 45-day hold on the contract.
YesCare declined to comment on Corizon’s bankruptcy in a statement to APR, calling it a “completely separate legal and financial entity.”
“While we are aware of the Chapter 11 bankruptcy filing, we will not comment on the proceedings of another company,” the statement says. “We can assure our clients that we remain dedicated to the care of patients and will continue to put the best interest of patients and communities first.”
The committee also pointed to undue influence as an attorney that had represented ADOC in numerous lawsuits had been appointed to YesCare’s board of advisors just weeks before the contract agreement was announced.