Embattled HDL Files for Bankruptcy

Fine from U.S. government pushes health firm over the brink.

The bad news just keeps coming at Health Diagnostic Laboratory. The firm has filed for Chapter 11 bankruptcy protection, owing more than 30 creditors $73 million.

The biggest creditor, as first reported by the Times-Dispatch, is the U.S. Department of Justice, which has assessed the firm $49.5 million as part of a settlement involving allegedly fraudulent pricing for blood tests that the local startup firm performed.

HDL also owes $2.4 million to its co-founder and chief executive, Tonya Mallory, who resigned abruptly in September after news broke of the firm’s alleged complicity in paying off doctors to use its tests.

Other creditors include the LeClair Ryan law firm and the Washington Redskins, to which HDL served as a “health partner” as part of the team’s summer training camp in the city. HDL owes the Redskins $250,000. HDL also owes the city of Richmond $250,000 in taxes.

Chapter 11 may seem inevitable after HDL’s run of very bad news. Once hiring at the rate of an employee a day, it’s laid off scores of workers since the scandal broke.

The company also lost credit facilities with an important bank. Joe McConnell, a co-founder and current chief executive, has said he is busy restructuring the firm to “core” goals. It will be under watch by federal regulators for five years.

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