Baltimore Behavioral Health Inc. has sold its West Pratt Street campus to an affiliate of the Abell Foundation for $3 million, according to a recently filed deed, a move that the struggling mental health clinic had long sought as a way to help stabilize its finances.
BBH will continue to operate at the Pratt Street location by leasing space in one of the two buildings there. The University of Maryland Medical Center will rent part of a second building for a program that it runs for the Baltimore City Office of Addiction Services.
But other challenges remain for BBH. On Tuesday, a federal court clerk entered a default order for its failure to respond to a lawsuit in which clinic employees alleged that executives "diverted and stole" money intended for their retirement plans.
The clinic still has time to respond before a default judgment can be made by a judge, said Richard Neuworth, the lawyer for the employees. BBH officials could not be reached for comment Thursday.
The clinic, specializing in the treatment of drug addicts also diagnosed with mental illness, bought its campus in 2004 for $3.3 million, according to property records.
The sale was finalized days after the clinic resolved a lawsuit brought by Bank of America saying that it was in default on loans of up to $2.5 million and had refused to give the bank "critical financial information."
Last year the clinic had some difficulty meeting its payroll. And the U.S. Labor Department has been investigating alleged shortfalls in its retirement plan. BBH provided payroll documents and other records after the government sued it and chief executive William K. Hathaway in federal court.
A nonprofit company founded in 1997, BBH has received more than $65 million over the past five years in government payments, largely from billing the Medicaid program for the poor and disabled. A series of articles in The Baltimore Sun in 2010 revealed unusually high Medicaid billings and detailed the clinic's control by Hathaway and several family members who earned six-figure salaries.Copyright © 2015, CT Now