Dive Brief:
- Pacs Group CFO Derick Apt resigned from his post last week at the request of the company’s board of the directors, following reports he improperly accepted gifts from individuals that do business with the company.
- The nursing home company has named co-founder and Vice Chair Mark Hancock to interim CFO while they search for a permanent replacement, according to a Sept. 8 securities filing.
- The CFO’s abrupt departure is the latest challenge for the company. In November, the New York Stock Exchange threatened to delist the company after it failed to file its quarterly reports in a timely manner.
Dive Insight:
Pacs Group, which operates more than 300 skilled nursing facilities across 17 states, says it uncovered Apt’s conduct during a larger investigation into its billing practices.
The company disclosed scant details about the nature of Apt’s conduct. However, Pacs said the executive received a “series of high-value items” from Pacs business associates.
Hancock will step into Apt’s position effective immediately. He previously served as CFO from January 2013 to January 2024, when Apt replaced him, according to the securities filing.
Apt’s departure is the latest executive shakeup for Pacs. Last month, its president, P.J. Sanford, also resigned.
The company has also been scrutinized for failing to file financial results on time and some activist investor groups have accused the nursing home group of engaging in fraudulent activity.
Last year, now-defunct Hindenburg Research, a short-selling fund, published a report accusing Pacs of abusing a COVID-19 era Medicaid billing waiver.
Pacs has since audited its own finances, but has delayed releasing some of its earnings. In November, NYSE threatened to delist the company after it failed to report third- and fourth-quarter earnings for 2024. At the time, NYSE gave Pacs six months to get its finances in order or face delisting.
In May, NYSE extended Pacs’ trading period through September, and the company re-released financial reports from the first half of 2024 a month later, finding it had overstated revenue by $4 million. Now, Pacs has until Nov. 19 to produce the late filings.
The company’s stock price plummeted nearly 30% Tuesday following news of Apt’s departure. Pacs Group and Apt did not respond to a request for comment.
