ASHEVILLE - A $46 million lawsuit against an Asheville-based recovery management firm has been put on hold, unless owners of the company make periodic payments.
The owners of recovery management firm, Health Care Alliance North America, have entered into a forbearance agreement with former business associates to stave off a $46 million lawsuit, agreeing to "periodic payments" to avoid a confession of judgment.
HCANA is a management company for nine addiction and mental health treatment centers primarily across the Southeast. In Asheville, HCANA manages Oasis Recovery Center and Oasis Recovery II, along with Asheville Detox Center. The organization has provided recovery services to over 6,500 clients, according to HCANA's website.
In December, the Citizen Times reported the majority shareholders in the company — HCANA CEO Jon Wood and business partner David Glenwinkel — had bought out other shareholders in a June promissory agreement totaling just over $15 million. Wood and Glenwinkel failed to pay before their Sept. 29 deadline.
After Wood and Glenwinkel defaulted on the promissory notes, former business associates Eastern Management Recovery filed the lawsuit seeking $46 million in treble damages, claiming that Wood had made misleading statements about providing the money.
Wood claims a falling out with a shady investor — identified only by the name Todd — led to a lack of capital to fulfill the promissory agreement.
The Wyoming-based company owned by Wood and Glenwinkel, Glenwood Enterprises LLC, will have to pay Eastern Recovery Management "periodic payments" to fulfill the agreement, according to a consent motion to stay filed Jan. 9 at the Buncombe County Superior Court.
Final payment from Glenwood Enterprises is due on July 16, with an option to extend an additional 180 days. The filing does not indicate the amount of the payments.
If the company fails to make its payments, Glenwood Enterprises has signed a confession of judgment, where Eastern Recovery will be able to bypass filing a lawsuit and collect the remaining debt.
Both parties in the legal dispute came to the forbearance agreement on Dec. 27, where fulfillment of the full periodic payments will "resolve all aspects of the dispute underlying this action."
In prior Citizen Times reporting, Wood expressed a desire to pay more upfront in order to continue the payment period.
Eastern Management Recovery declined to comment on the agreement.
The Citizen Times reached out to CEO of HCANA Jon Wood, who could not be reached for comment by deadline.
More:Asheville-based addiction recovery provider embroiled in $46M suit; Services impacted?
Will Hofmann is the Growth and Development Reporter for the Asheville Citizen Times, part of the USA Today Network. Got a tip? Email him at WHofmann@citizentimes.com. Please help support this type of journalism with a subscription to the Citizen Times.
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