The physician shareholders of Mid-Continent Anesthesiology have filed a lawsuit against two former presidents of the corporation alleging fraud, among other things.
Attorney Randy Rathbun, who is representing Mid-Continent, alleges that physicians and former presidents Gerard Bassell and Robert McKay “essentially through threats and intimidation stole in excess of $4 million.”
Attorneys for the defendants have filed motions to dismiss the case, and they will be heard at 9 a.m. Friday.
“The notion that Dr. Bassell did something wrong is misguided,” says Jay Fowler, Bassell’s attorney.
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“His efforts built the practice and made it successful.”
Fowler and McKay’s attorney, John Gibson, both say the lawsuit is vague and therefore should be dismissed.
“Claims of that nature … need to be filed with specificity,” Fowler says.
Gibson says he doesn’t have much more to say about the claims “other than to say that’s all just completely wrong.”
Mid-Continent provides services at Wesley Medical Center’s obstetric suite and previously also provided services to Surgicare of Wichita.
In addition to being a physician at the practice, Bassell was president from about 2000 through 2015, and McKay was treasurer at that time.
“Bassell was fond of saying that he ran MCAC as a ‘benevolent dictatorship,’ ” according to the suit, which was filed March 7 in Sedgwick County District Court. “The truth was that he ran MCAC through lies, fear and intimidation.”
According to the suit, there was secrecy around corporate documents and intimidation and threats if shareholders asked to see financial data.
“Bassell made it clear that such requests would be met with consequences,” the suit says.
It says he used the corporation “as his own personal fiefdom which he plundered at will.”
“Defendants’ conversion of assets were concealed as compensation, bonuses or administrative salaries to them.”
Rathbun says the petition has “plenty of detail.”
“Over the period of accounting that we’ve been able to look at the books, we have found that these two presidents took out in excess of $4 million beyond what everybody else was being paid,” he said.
The suit says in 2012, Bassell told shareholders that Mid-Continent’s financial condition was dire and that salaries and vacation times had to be cut.
“Unbeknownst to the shareholders, during this time period Bassell increased his vacation days and upped his pay an additional $85,000 per year,” the suit says.
When Bassell retired, Rathbun says, he appointed McKay his successor instead of following corporate bylaws and holding an election. The suit also alleges that Bassell didn’t follow bylaws that called for holding annual shareholder meetings.
The suit alleges that in addition to paying himself an extra administrative salary, McKay loaned himself money from the corporation and then forgave the loan following several payments. The suit says the corporation’s board voted unanimously to terminate McKay in August 2017 for misappropriation of funds.