Last June, Dana Nelson abruptly closed Healthplus’ Cambria Village Pharmacy, calling it a sacrifice to keep his company’s San Luis Obispo location open.
At the time he cited a perfect financial storm of rising drug prices, falling payments from insurers and Medicare, and cash-strapped patients not filling their prescriptions, or ordering online or internationally.
Now Nelson and Healthplus have filed for Chapter 7 bankruptcy liquidation — and a large part of the company may be sold for more than $200,000 to Thrifty Payless, a division of Rite Aid Corp., according to bankruptcy court records.
Healthplus listed assets of $449,600 and liabilities of $2,170,703 to between 100 and 199 creditors in documents filed in March.
Premium content for only $0.99
For the most comprehensive local coverage, subscribe today.
The company’s financial problems mounted in recent years; it listed income of $193,360 in 2010, followed by losses of $876,755 in 2011 and $347,625 in 2012.
In Nelson’s individual Chapter 7 bankruptcy filing, he listed assets of $537,150 and liabilities of $2,099,197. Records show the biggest assets are his home, worth $409,000; a 42-foot boat worth $80,000; and pharmacy inventory worth $30,000. He also owns 100,000 shares of stock in Healthplus Pharmacy Inc., worth nothing.
As the president and sole shareholder of Healthplus Pharmacy Inc., Nelson listed many of the same assets and liabilities on both the corporate and individual bankruptcy filings, such as his home and pharmacy inventory.
The Tribune could not reach Nelson for comment.
Bankruptcy court documents list nine pending civil suits or actions filed against Healthplus in San Luis Obispo Superior Court or other California courts, including for $140,000 owed to Greg Moore Construction Inc.; $120,000 in back rent to Healthplus’ landlord, University Square of San Luis Obispo; $80,000 to Anda Inc.; $36,636 to KSBY; and $5,000 in back rent to its previous landlord for Cambria Village Pharmacy.
Healthplus Pharmacy also owes wages to 13 employees (excluding Nelson) totaling $17,307 and local, state, and federal taxes totaling $82,947.
The company’s largest creditor is Pacific Western Bank, which lent Healthplus more than $374,000 for business and business construction loans. Other significant creditors include Merrill Lynch Home Equity Service Center, owed $149,762 of a home equity line of credit; and Village Market Place LLC, owed $200,000 as rent for a future pharmacy location, the documents show.
In 2010 Nelson planned to double the size of his pharmacy on Foothill Drive in San Luis Obispo to create a “wellness clinic,” according to previous Tribune reports.
Greg Moore, president of Greg Moore Construction, said Tuesday that his company began work on the expansion but stopped sometime in early 2012, when Healthplus stopped making payments.
Before the bankruptcy filings, Healthplus was in escrow to sell a large portion of its business to Rite Aid, which performed an inventory of Healthplus pharmacy in January, according to court records.
It is up to Healthplus’ court-appointed trustee to decide whether and how to pursue the sale. The prime beneficiary would be Pacific Western Bank, which holds a first position secured claim against all assets of Healthplus Pharmacy.