Three former directors of Miami-based primary care specialists Cano Health have stepped up their pressure on the company with an open letter to other shareholders which refers, among other issues, to Cano's "staggering underperformance."
Barry Sternlicht, Elliot Cooperstone and Lewis Gold, MD, who together own about 36 percent of Cano Health shares, recently resigned from the struggling provider to form an investor group aimed at ousting CEO Marlow Hernandez, DO, and at turning the company around.
The letter says Cano has "lost all credibility with its shareholders" in the way it has eaten through cash with ill-advised acquisitions. It also raises questions about Dr. Hernandez and business relationships with family members, something it terms as "deeply troubling."
These include claims Cano Health paid $23 million to a company controlled by Dr. Hernandez's father for general contractor work at Cano facilities and an $8.5 million payment to a dental services provider owned by Dr. Hernandez's wife. Dr. Hernandez's brother and mother are also dentists employed by a dental provider where his wife sits on the board and which offers services to Cano Health, the letter claims.
"How can Cano shareholders be sure that these Hernandez family arrangements are negotiated at arm's-length, at market rates and have been fully disclosed to shareholders?" the letter asks.
Cano Health reported a $428 million loss in 2022 on revenue of $2.7 billion. The company declined to comment on the contents of the letter.
The full letter can be found here.