Court documents filed with Canopy’s Chapter 7 bankruptcy today show that the company owes nearly $26 million — most of it to holders of Health Savings Accounts that were managed by Canopy or one of its partners.
The difference between what Canopy thought was in the accounts and what remained there as of November 30 is nearly $20 million. Thousands of accounts are affected — the documents show that 13,697 accounts, with a balance of more than $17 million, were held by Coventry Health Care. Coventry is reimbursing its account holders and has filed a claim to get the money back from Canopy.
Other account holders include Dewitt Stern, FlexRight, ISU Financial Services, Shawnee Administrative Services, Veritas Health Systems Administrators and Canopy itself, through its Wellfund program.
Account holders may have a tough time getting their money back, though, at least for awhile. Canopy lists assets of nearly $19 million — including $6.1 million for its CareGain and HealthDirect software platforms, which are being sold to Trizetto — but that’s a guess, because the company still isn’t sure what happened to all of its money and how much it really has.
Some bank and financial records can’t be located, the company says. “It is not clear whether these records were ever maintained in the ordinary course of (Canopy’s) business, or whether the books and records in question were wrongfully removed, concealed or destroyed.”
Here are some other tidbits from the court docs:
- Fraudulent financial statements were sent to Spectrum Equity, which invested in Canopy’s last financing round; the Federal Trade Commission (!) and Venture Lending and Leasing. Canopy is still checking to see whether others also received fraudulent statements.
- Former president Jeremy Blackburn, who’s now charged with wire fraud, and former chief technology officer Anthony Banas supervised Canopy’s books, while chief administrative officer John Ingram maintained “certain lists of receipts and disbursements.”
- Holders of Health Savings Accounts hold unsecured, non-priority claims and will stand behind several government agencies to which Canopy believes it owes taxes.
- NetJets, a private aviation company that offers fractional ownership in jets and promises the ability to “live life without limits” received payments of nearly $750,000.