Creditors’ Committee Demands Bank, Tax Records From Inspired Healthcare’s Former CEO
The Official Committee of Unsecured Creditors in the Inspired Healthcare Capital bankruptcy has served Luke Lee, the company’s former chief executive, with a formal demand for 25 categories of personal documents, according to a notice filed Aug. 26. The committee, known in the case as the UCC, served the demand through Lee’s own counsel. Served through Lee’s own counsel, Daniel Geoghan of Cole Schotz P.C., the request seeks his personal and business bank and brokerage account records, tax returns, any transfer of more than $10,000, records of real property he owns, insurance and indemnification agreements, and his communications with the debtors dating back to Jan. 1, 2023. Production is due Sept. 2.
Lee, a co-founder of IHC, led the company as CEO through its Chapter 11 filing on Feb. 2, and court filings describe him as having served in that role through the petition date. He has since stepped down as chief executive but remains, according to filings reviewed by AltsWire, both a current officer of the debtors and a common and preferred equity holder – an unusual dual status for a former CEO more than six months into the case. The debtors’ own schedules of assets and liabilities state that Lee was “retroactively terminated” as chief executive shortly after the Feb. 2 petition date, suggesting his departure was formalized only after the case began rather than announced at the time.
The UCC’s demand arrives alongside a separate fight already before Judge Mark X. Mullin: Lee has his own motion pending – filed months ago and now set for a hearing Oct. 14 – asking the court to authorize the use of proceeds from IHC’s directors-and-officers insurance policies to cover his personal legal defense costs. The debtors’ own June 28 complaint against Lee and several broker-dealers, filed to open a related adversary proceeding, lays out why that request is contested: the debtors say they believe they hold their own estate claims against Lee arising from his conduct as CEO in connection with the company’s private placement offerings – the same securities sales at the center of the case’s Financial Industry Regulatory Authority arbitration claims and U.S. Securities and Exchange Commission review.
That matters because the insurance tower is small and shared. According to the debtors’ complaint, IHC’s directors-and-officers insurance coverage totals $10 million: a $2.5 million primary policy through Sompo, layered with three excess policies of $2.5 million each through Nexus, Hudson and CapSpecialty, covering a policy period running from June 2024 to June 2025. It is, in insurance terms, a “wasting” program, meaning defense costs paid out to Lee reduce the same pool of money the debtors themselves may ultimately need if they pursue their own claims against him.
The scrutiny on Lee is also widening on fronts that have nothing to do with the D&O fight. Court filings show he personally guarantees more than $55 million in Pinnacle Bank loans and a separate loan from UMB Bank. On Aug. 24, the debtors themselves, not a creditor, subpoenaed Heritage Bank for account records tied to Lee and a second individual, Patrick Lam, along with more than a dozen affiliated entities named “Sukiyaki 1” through “Sukiyaki 14.” Neither the subpoena nor any public filing yet explains what the debtors are investigating, and no complaint has been filed alleging wrongdoing by Lee or Lam.
Lee is also a named defendant, alongside broker-dealers Aurora Securities, Emerson Equity, LightPath Capital, Quincy Wells Capital and Realized Financial, in the adversary proceeding the debtors opened in June to extend the bankruptcy’s automatic stay to those non-debtor parties. That case is the legal vehicle behind the FINRA-claims injunction AltsWire has covered since summer: a temporary freeze on 66 arbitration claims in early July, a deferred ruling later that month, and ultimately a 120-day pause on more than 100 claims, set to expire Nov. 21. The adversary case was back before the court Aug. 27, when the broker-dealer defendants asked the judge to clarify the scope of that injunction. The court granted that request the next day: an order entered Aug. 28 clarifies that where a single FINRA arbitration claim bundles both IHC-related and unrelated claims against a broker-dealer, only the IHC-related portion remains stayed, while the rest of the claim may proceed.
The July 24 injunction itself is now being challenged on appeal. Two groups of FINRA claimants – including a six-firm coalition representing 66 arbitrations, led by Soriede Law Group – have appealed Judge Mullin’s order to the U.S. District Court for the Northern District of Texas, arguing across 15 grounds that the bankruptcy court lacked authority to extend the stay to non-debtor FINRA arbitrations. The appeals have been consolidated into a single case; no ruling has been issued.
Lee was previously sued by an Emerson Equity-affiliated fund over an alleged $1.5 million loan misrepresentation, a dispute that predates the Chapter 11 filing. Taken together, the picture emerging from the docket is of a former chief executive facing formal document demands from the creditors’ committee, a subpoena from his own former company, personal guaranty exposure to at least two secured lenders, and defendant status in the debtors’ own adversary case – all while asking that company’s insurers to foot his legal bill.
No auction outcome has been confirmed. AltsWire reported when the auction opened Aug. 25 that bids had grown to at least $697 million, up from the $341.7 million in stalking-horse bids logged in July, even as six secured lenders – owed a combined $233 million – and the Delaware statutory trust investors’ agent objected to the sale contracts over an unresolved proceeds split affecting the roughly $1.2 billion in capital IHC raised from DST investors. Neither story, nor anything filed since, discloses who won or what the winning bids ultimately totaled. A sale hearing remains set for Sept. 15.
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