Infinia Medical Center, a 167-bed mixed-use care facility in Holladay, has closed, affecting more than 120 workers and requiring the transfer of an undisclosed number of patients to other area facilities.
An affiliate of State Street Bank & Trust Co. foreclosed last Thursday on the beleaguered facility, according to bank attorney Robert Lochhead. Infinia Medical, 1255 E. 3900 South, once operated as the Doxey-Hatch Medical Center (an equally battered concern that slid into Chapter 11 bankruptcy three years ago).
An attorney for one of the two men who tried to make a go of reviving the medical center through a complex business structure confirmed Wednesday that they find themselves the target of ire on the part of employees, some of whom claimed they have not been paid, and multiple liens on corporate assets by both banks and the Internal Revenue Service.
Scott Robertson and Alan W. Cottle acquired a majority stake in Infinia through a company they share, GDH LLC. GDH owns a 75 percent interest in Infinia Medical Center through a holding company, Holladay Medical LLC. Both Robertson and Cottle also were principles in Infinia Health Care, which operates several medical centers along the Wasatch Front. (Cottle is no longer associated with Infinia Health Care.)
Dave Grant, Robertson's attorney, confirmed that when employees were notified of the medical center's financial woes, they approached Infinia Health Care to ensure that they would be paid for their work. Infinia Health Care informed the workers it was not affiliated with the medical center, except through Robertson.
Grant said an IRS lien on Holladay Medical's assets initially prevented the company from paying out any money, including payroll expenses. The government has since allowed the company to pay employees from June 6, the date of the bank foreclosure, to June 10, the date the last patients were transferred from the facility.
However, some employees have yet to be paid for work performed from the date of their last pay period to the date of the foreclosure. That money is not available, Grant said.
"It's a tragedy, what happened at the medical center," he said. "There is regret (in Robertson). But he has come out of his personal funds to help tide the employees over until they can find other jobs."
When negotiations to continue operations at the center failed — first with the bank, then with an outside group of potential investors — Robertson gave each of the employees $100, Grant said, noting the money was not a settlement, but a gesture.
The company had declared Chapter 11 bankruptcy, but Grant said Wednesday he will file a joint motion with counsel for Holladay to dismiss the bankruptcy.
"The bank has a lien on most of the assets of Holladay. The IRS has a lien on all of the assets," he said. "Holladay has no unencumbered assets. So at this point it doesn't make any sense to continue with the bankruptcy. At this point, it will be a determination between the bank and the IRS as to the division of assets."
Ronald Russell, an attorney representing the lender, said some businesses remain open at the center, including an optical shop. But the fate of Infinia Medical ultimately will be decided by the new owners.
"There are some businesses that are still there, tenants who I believe will probably remain," Russell said. "But as far as what the owners' plans are, I think they're still trying to learn more about the facility and the market, and will be making decisions in the future."
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