Moda Deal Moves Forward Despite CEO Ouster
The chief executive at Delta Dental of California was fired over a relationship with an employee but that will not affect the $155 million deal with Moda Health.
The board of Delta Dental of California has ousted its president and chief executive but that's not expected to affect its $155 million deal with Moda Health.
Tony Barth, a 17-year-employee of Delta Dental of California who oversaw the Moda negotiations, was fired by the company's board for not reporting a consensual relationship with another staff member, according to a news release.
“Delta Dental’s culture is based on a strong set of ethics and values, including trust, service, excellence and innovation," Lynn Franzoi, board chair, said in the statement. "As one of the nation’s largest dental benefits providers, these values are vital to our culture, guide how we operate and treat one another, and are essential to our future success.”
The board appointed the company's chief financial officer, Mike Castro, to serve as acting CEO until a permanent replacement can be found.
“Mike has been a widely respected leader at this company for almost two decades, and he has the full confidence and support of Delta Dental’s board," Steven McCann, a member of the board, said in the statement. "With a strong acting CEO and talented senior leadership team, we expect a seamless transition.”
Both sides told The Lund Report that the leadership change will not affect the alliance between Delta Dental and Moda.
"I’m happy to report that the new leadership team at DDC has reaffirmed the company’s commitment to its partnership with Moda," Jonathan Nicholas, Moda's spokesman.
The California company agreed to invest $155 million in Moda as part of a strategy to expand its services. The money puts Moda, which has struggled financially, on sound footing. Moda reported negative net incomes in 2014, 2015 and 2016. Moda is also embroiled in a court fight with the federal government over $214 million Moda says it is owed in so-called risk corridor payments.
The deal between the two companies involves Delta Dental being represented on Moda's board. Nicholas said that the board has not yet been formed.
Next Monday, the Department of Business and Consumer Affairs, Oregon's agency that oversees insurance companies, is holding a public hearing on the alliance. The public can comment at the meeting, at 6 p.m. at the Courtyard Portland City Center, 550 S.W. Oak St., Portland, or email comments to [email protected] or send them by mail to Oregon Department of Consumer and Business Services, Division of Financial Regulation, Attention: Moda Form A, P.O. Box 14480, Salem, OR 97309-0405.
The meeting is required by law. It's not expected to pose a problem.
"We anticipate that the transaction will close upon receiving regulatory approval, which is likely before year’s end," a Delta Dental spokeswoman told The Lund Report in an email.
You can reach Lynne Terry at [email protected].
Oct 24 2018