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Owner of St. Louis hospital diverted funds meant for construction projects, lawsuit alleges

The allegations come as the hospital is in the process of being sold by SA Hospital Acquisition Group LLC to California-based American Healthcare.

ST. LOUIS — A company hired to make improvements at South City Hospital says in new litigation that the facility's owner diverted funds meant for those projects, as it seeks millions in damages.

The allegations come as the hospital, at 3933 S. Broadway, is in the process of being sold by SA Hospital Acquisition Group LLC to California-based American Healthcare, and it faces another lawsuit from its ex-CEO over pay he says he's due.

SA Hospital Acquisition, whose managing members are Lawrence Feigen and Jeff Ahlholm, denied the new claims through an attorney, Mayer Klein. "The suit will be defended vigorously, and we are confident that there will be a resounding judgment in favor of the hospital," Klein said in an email. SA Hospital Acquisition, hospital real estate entities, Feigen and Ahlholm are listed as defendants in the new lawsuit.

B.R. Building Resources Co., of Glendora, California, said in the suit, filed Nov. 2 in Los Angeles County Superior Court, that it entered agreements in 2021 with SA Hospital Acquisition in which it was to be paid $11.6 million for construction work "to improve different portions" of the hospital.

On Jan. 3, 2022, it said, Feigen and Ahlholm asked B.R. Building Resources to wire them $826,937 from a construction fund meant to cover the projects. The owners wanted the funds "to cover operating costs" for South City Hospital, it alleged.

The suit said additional payments of $200,000, also on Jan. 3, and $400,000, on March 3, followed, with Feigen and Ahlholm assuring B.R. Building Resources it had the approval Twain Financial Partners, which was financing the construction work. 

Click here for the full story from the St. Louis Business Journal.

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