Recovery center ‘ran out of cash,’ CFO says

PALM SPRINGS, Fla. — Alexander Hoinsky said he has known about Retreat Behavioral Health’s dire financial situation for at least a year, but he grew more concerned over the last two months as the company’s top executives stopped taking his calls.

Hoinsky, who has served as Retreat’s chief financial officer for the last five years, told WPTV by phone: “I left messages and emails [and] laid out what was going to go forward. Basically, they did not want to hear it.”

The CFO said it’s been two months since he has spoken to Peter Schorr, president and CEO, and he has not communicated with Scott Korogodsky, chief administrative officer, for “about a month.”

Retreat Behavioral Health announced the death of Schorr, the company’s founder, in a Facebook post on Saturday. Delray Beach police confirmed that officers responded to a death by suicide at Schorr’s home at about 8:30 a.m. the day before.

Five days later, on Wednesday, Korogodsky also died by suicide at his home in Lantana, according to police.

“Did I think it would happen? No. But, the fact that they didn’t want to communicate with me — the person who always gave them the bad news — told me something,” Hoinsky said of the recent deaths.

Region C Palm Beach County

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Retreat at Palm Beach, the company’s facility on Lake Worth Road in Palm Springs, abruptly closed on Friday. Employees told WPTV that about 100 mental health and substance use patients were discharged, including 30 patients who were left with nowhere to go. Employees also said Retreat did not issue paychecks to roughly 200 employees for the last two-week pay period.

“Here’s the facts: the company ran out of cash,” said Hoinsky, who pointed to a dramatic decrease in patients. “Revenue dropped drastically and they didn’t adjust costs.”

Retreat’s facilities in Lancaster County, Pennsylvania and New Haven, Connecticut, also shut down, leaving hundreds of additional employees and patients in the dark, according to media reports.

Kevin Walker, executive director at Retreat’s Pennsylvania location, sent a statement to WGAL-TV that said, “Obviously, this is a difficult and sad time for us. Due to some financial challenges and the unexpected passing of our founder and owner on Friday, we have made the difficult decision to, at a minimum, suspend operations temporarily.”

Region C Palm Beach County

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Hoinsky said Schorr “had total control of the cash” while he managed the processing of payroll and helped put together the budget. The company spent $1.5 million every two weeks to pay its 750 employees in three states. He said all employees, including himself, have not received their most current paycheck.

“Do you anticipate that the employees will see their money soon,” WPTV reporter Joe Fisher asked Hoinsky.

“They should,” he replied. “I had no control over the money and I have no control over the money now.”

WPTV reported earlier this week about two pending lawsuits that shed light on Retreat’s financial turmoil.

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A lawsuit filed in January against Schorr in Palm Beach County accuses him of hanging onto a $50,000 deposit for a property sale that didn’t go through. A New York lawsuit seeks more than $5 million from the company that owns Retreat for “numerous defaults” on a loan, dating back to 2018.

In addition, court records show the Palm Beach County Tax Collector sued Retreat Behavioral Health for not paying a property tax bill worth about $1,700.

Hoinsky said he was aware of the lawsuits; however, he said he was not involved in rectifying those situations.

The CFO, who said he’s not entirely sure if he still has a job, expressed optimism that employees will be paid when additional money is collected from insurance companies.

“I have not heard from anybody,” Hoinsky said. “I assume I will have nothing at all to do with the company moving forward. That’s where I am at.”