Judge Temporarily Bars Cardinal's Former Leaders From Organization's Cash

Just days after North Carolina's Department of Health and Human Services took control of Cardinal Innovations Healthcare, officials have found an email exchange between ousted Cardinal CEO Richard Topping and the ousted members of its board.

DHHS officials say Monday's takeover was necessary because of what they see as serious financial mismanagement by Cardinal's leaders, namely lavish spending on parties and retreats and excessive pay for the CEO and very generous severance packages for Topping and 10 other key employees.

Now there may be more.

Attorneys with North Carolina's Attorney General's office argued in court this morning that some of the ousted members may have tried to move some money out of Cardinal's accounts just before state officials took control of the company on Monday.

A Mecklenburg County Superior Court Judge has now granted a temporary restraining order for 10 days to stop Topping and former board members from interfering with the temporary DHHS takeover and accessing the organization's funds. 

Michael Wood with the state Attorney General's office said in court today, “More importantly let's not let anybody get access to those funds while we sort out and see what is going on here,” Wood said. “We can't have more funds going out the door for corporate pay or severance or whatever that is, we need to make sure those public funds are secured.”

The e-mails were sent Sunday. That's one day before the state's surprise takeover of Cardinal Monday afternoon.

Topping writes to former board chairwoman Lucy Drake and board member Steve Yuhasz:

“Steve and I connected. Yes his idea is brilliant. I'll be retired with time on my hands, so I'd be happy to help from the outside. It was in our ‘if we lose our contract' contingency planning, so I've already given thought about how to make it happen. The key, of course, is that it has to be done before the state raids – whether legal or not – the fund balance. If the money is gone they have to chase it. Since they don't have a legal right to it they'll never get it. if they already have it will be much harder to get it back. You can use the money to defend the money. But if it is gone you can't use it to chase it.”

Drake responds by saying, “Well, I use to have your private e-mail. Guess will need! We definitely need to do this. Dave is such a liar. Whatever we need to do to get this done I'm in. Our funds are needing to get secured for certain.”

It is unclear what Steve's idea is, what the contingency plan is or how the now former CEO and board members have or will enact it.

There are a lot of unanswered questions, such as why state officials worry Topping and other board members could still have access to that money even though they've been removed. However, some board members have indicated they will challenge the state's takeover in court.