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Mark Bello
Mark Bello
Attorney • (877) 377-7848

Bankruptcy or Tort Reform: Either Way Victims are Penalized


Over 250 medical malpractice lawsuits have been filed against, Dr. Spyros Panos, Mid-Hudson Medical Group, parent of Saint Francis Hospital and Health Centers and Vassar Hospitals, and both hospitals.  Dr. Spyros Panos, an ex-orthopedic surgeon, has been accused of opening patients surgically without performing an actual procedure, botching surgeries, doing unnecessary surgeries on healthy patients, and prolonging patients’ ailments solely for financial gain.  One of Panos’s alleged fake surgeries resulted in the death of 76-year-old woman.  Several lawsuits allege the hospitals failed to notice, limit, and question the high volume of patients Panos would see on any given office day or question the spike in his billing.  He is said to have scheduled as many as 22 surgeries PER DAY (most surgeons only schedule 32 procedures a month, according to industry statistics).  According to his surgical schedules at Vassar, it was not uncommon for Dr. Panos to be in nearly back-to-back surgeries over the course of 12-hour-long surgery days, often with two patients under anesthesia at the same time.  Court records indicate that the alleged “fraudulent claims” resulted in $13 million paid to Mid-Hudson Medical  for Panos’ surgeries and $3.5 million for Panos’ treatments during office visits.  With this kind of money being paid to the hospital, is it really that surprising that they may have “looked the other way”?

A federal investigation dates back nearly a year ago, when subpoenas for Panos’ medical records were served on Mid-Hudson Medical Group, SaintFrancisHospital and HealthCenters, and VassarHospitals.  Meanwhile, Mid-Hudson was working out a deal with Mount Kisco Medical Group that may have been an effort to evade liability.  The transaction would have transferred Mid-Hudson’s assets to MountKisco, leaving Mid-Hudson as nothing more than a shell company that would eventually dissolve.  Last November, Dr. Panos pleaded guilty to the fraudulent scheme; he agreed to forfeit $5 million in assets, and the U.S. Attorney’s Office ordered Mid-Hudson Medical Group to pay $5 million in a civil settlement. Mid-Hudson claims it was an “innocent owner,” having no involvement in, knowledge of, or participation in the fraudulent scheme, and the forfeiture “in no way constitutes or should be interpreted as an admission of liability or wrongdoing by any of the parties.”  Every time Dr. Panos “alleged” performed surgery, the hospital got paid.  How could they accept this flow of money and not know where it came from?  Greed seems to have been the motivating factor here, Panos lined his pockets but the benefiting medical groups and hospitals were just as guilty, just as greedy.  They certainly had no problem reaping the benefits from the money brought in by Panos surgeries.

The latest slap in the face to victims is that SaintFrancisHospital and HealthCenters has filed for Chapter 11 bankruptcy, freezing its assets.  This, of course, raises questions of when and how victims will ultimately be paid.  The hospital administrators concealed, covered up, and hid the truth for years to avoid responsibility for their actions and to keep ill-gotten profits.  Dr. Panos lied, cheated, and robbed patients of good health and Saint Francis covered it up.  Now, the hospital is asking that the court unfreeze the medical malpractice lawsuits and allow them to be settled for insurance policy limits only (no out-of-pocket hospital assets).  Why?  Because it is losing money at a rate of roughly $3 million a month and the hospital wants to sell its assets to pay its debts. Some plaintiffs’ attorneys said they will agree to the hospital’s condition, while others want to wait and see if insurance is enough to cover damages.  If plaintiffs agree to accept policy limits, this limited amount is all they will recover, regardless of their injuries; however, if the hospital succeeds in its bankruptcy proceedings, the plaintiffs are unlikely to obtain any compensation.

I presume that the insurance provider(s) has signed off on this deal; while Panos and administrator conduct is abominable, the carrier’s liability is capped and certain.  Insurance companies like that.  But the whole bankruptcy-insurance capped settlement scheme becomes the defendants’ way to bilk innocent victims, especially in cases like this where multiple cases arise from the same doctor’s negligence.  If the plaintiff’s agree to Saint Francis’ request, they will, almost assuredly, get less than they deserve.  In situations where the damages exceed insurance limits (or insurance limits are unreasonably low), with assets tied up in bankruptcy court for who knows how long, seriously injured former patients/victims are left with taking these limited damages or facing the real possibility of seeing nothing, their claims discharged in a bankruptcy proceeding.

Those of you familiar with my writings know that I am a staunch defender of victims’ rights.  I am, absolutely, opposed to all forms of restrictions on compensation which have commonly been called “tort reform”.  With tort reform, innocent victims are stripped of their rights to just compensation by politicians who accede to the desires to greedy corporate types that contribute billions to their political campaigns.  But this is even worse.  Saint Francis will use bankruptcy to deny victims full recovery, pay its bills with the savings, and come out of bankruptcy smelling like a rose.  The big losers in these situations, as always, are the individual victims who, because of injury, disability and under-compensation, become financially destitute and in need of government assistance.  If personal responsibility matters to you and you support this kind of “bailout” for the wealthy (whether it is called “bankruptcy” or “tort reform”) you are on the wrong side of this issue.  Hopefully, a fairer compromise will be reached and victims will be treated with dignity and respect.  Hopefully the attorneys who represent them will negotiate the best possible result for them.  I will be watching.

Mark Bello has thirty-six years experience as a trial lawyer and fourteen years as an underwriter and situational analyst in the lawsuit funding industry. He is the owner and founder of Lawsuit Financial Corporation which helps provide cash flow solutions and consulting when necessities of life litigation funding is needed by a plaintiff involved in pending, personal injury, litigation. Bello is a Justice Pac member of the American Association for Justice, Sustaining and Justice Pac member of the Michigan Association for Justice, Member of Public Justice, Public Citizen, the American Bar Association, the State Bar of Michigan and the Injury Board.


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  1. jc says:
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    Of course another group of big losers in these cases, should the hospitals and Dr. Panos go into bankruptcy would be the PLAINTIFF ATTORNEYS! Somehow, I would not be sad if they got nothing. I really do not get this one. Mark Bello is against medical malpractice tort reform limits. I guess now he is also against the bankruptcy process if a plaintiff attorney might not get paid.

  2. jc says:
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    In 2008, GM and Chrysler went into bankruptcy. As a result of this bankruptcy, bond holders did not receive all that they were due. Also, some accident victims, who were able to prove that their injury was caused by a faulty car made by GM or Chrysler, had their claims wiped out with bankruptcy. This is the way that bankruptcy works. I suppose that Mark Bello is against this system where car accident victims get their claims wiped out, because of auto bankruptcies.

  3. Jake says:
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    JC: Your comment, as always, misses the point of the article. What is your feeling, AS A DOCTOR, about the surgeon’s and the hospital’s behavior in this case? I have read numerous articles about this situation and NO ONE has criticized the lawyers in the case. You are the first to ignore the medical/hospital behavior and, instead, bash the lawyers who have done nothing wrong. Can you try, for once, to be unbiased and objective?

  4. jc says:
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    Jake, I am trying to be empathetic to these poor patients. Obviously, I do not believe that this should happen, and where I practice, I rarely see this. I know, in this instance, the lawyers may have done nothing wrong. But here is a suggestion to help these poor patients: Why don’t the lawyers dramatically reduce their legal contingency fees to these poor patients and allow the poor patients to keep more of whatever meager judgements that they get? This would be a very humanitarian thing that these lawyers could do and would greatly help the patients who have been so damaged.

  5. Albert says:
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    Dear JC, I know I am not as learned as you are,but don’t you think a person should be responsible for their actions? Do you think bankruptcy should be held up as a shield when even death has occurred? He has admitted guilt.
    When you say the lawyers may have done nothing wrong, I question the use of the word “may”. The person that did do something wrong was Mr. Panos and if the wronged patients are to get proper justice all the groups involved should come forth and admit their responsibility. It would be best for the injured.

  6. jc says:
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    Albert-Apparently, Dr. Panos does not have the money to pay the victims. Apparently the hospitals do not have the money to fully compensate the victims. Sounds like the hospitals are admitting liability, but they don’t have the money so they are declaring bankruptcy. Cannot squeeze blood out of a turnip! Mark Bellos is all upset because the hospitals are going thru bankruptcy and will have clean balance sheets after the bankruptcy process. Well, that is what bankruptcy is for! It is to give individuals, and companies a fresh new start all over again.

  7. Jon says:
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    Dr Cox: Don’t disagree about the purpose of Bankruptcy. But here, it seems that it is being used as a shield to protect doctor and hospital from being held fully accountable for shameful and harmful conduct. The taxpayers will get the bill for instead of those responsible. When a person or business has a debt to income problem and beds to file bankruptcy, that’s one thing. But when a doctor and a hospital make millions doing bad things to good people, they should not be allowed to shield assets from the innocent victims of their misconduct. As for the lawyers, you have no idea whether or not they are cutting their fees; mant probably are and many more do so, routinely, to help clients obtain justice. Your hatred of lawyers blinds you and taints reason. This situation is a medical/hospital misconduct situation, yet you can’t resist finding a way to excuse the bad conduct of those in your profession while bashing those who are valiantly trying to hold them fully accountable. Shame on you, sir.

  8. Jon says:
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    By the way, I also find it interesting that your solution to providing justice is to have lawyers cut hard earned fees while allowing the doctor and hospital who earned millions and damaged patients to use bankruptcy to prevent full collection of their assets. Are you advocating for them to keep the money they made for doing all of these questionable and negligent procedures? The victims and the lawyers should take the hit? Again, your hatred and bias is shameful.

  9. jc says:
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    Jon- -Bankruptcy is a legitimate means for businesses and individuals to start fresh. It is available to all Americans. So if the doctors and hospitals want to go thru that process, that is their right. The bankruptcy court will take assets as appropriate and distribute them to the creditors on a fair basis. If the lawyers are so concerned about the decreased damages available to the victims, they should be willing to cut their 40% contingency fees and allow that money to flow to the poor victims, to help them out. I do not see how these views are either biased or shameful. It is interesting how lawyers are so concerned about the victims rights except when it impacts their fees.

  10. Jon says:
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    Whether bankruptcy is legal or not misses the point. Getting a 40% fee is legal! but it doesn’t stop you from accusing lawyers of being “greedy”. Using legal means to avoid responsibility for your own bad conduct doesn’t make the bad conduct good. And a system that allows wrongdoers to keep the fruits of their wrongdoing needs to be changed. In your world, the wrongdoers are right and the people who are trying to hold them accountable are wrong and “greedy”. You have zero credibility, always advocating for more protection for wrongdoers and distorting the points that good people make when they call out those wrongdoers for their despicable conduct. Do you ever read what you write? Do you really believe all of that crap? Why don’t you just go practice medicine somewhere where you can injure, maim or kill patients in the system you so desperately advocate for? Wait, you’ve already done that here, in America, haven’t you?

  11. jc says:
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    Jon, in my world, doctors frequently are asked to reduce their fees to patients who have come upon hard times. We generally do it, because we are here to help patients. It is distressing that in this situation, the insurance companies are authorized to distribute “policy limits” to help the victimized patients, the hospitals are going into bankruptcy and some of their assets may be distributed to the patients. Yet still you and Mark Bello want to hold people accountable when they can no longer pay! Yet when I mention that it would be humanitarian for the plaintiff attorneys to reduce their 40% contingency fees to help the victimized patients, I am called biased, that I demonstrate hatred for the lawyers, and profanity is used. How dare I suggest that plaintiff attorneys reduce their fees so that more money can be given to injured patients! This demonstrates to me, what I have said all along, PLAINTIFF ATTORNEYS ARE FAR MORE INTERESTED IN PRESERVING THEIR FEES THAN IN LOOKING AFTER THE WELFARE OF THEIR INJURED CLIENTS.

  12. Jon says:
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    First, I’m not a lawyer. Second, nowhere does any report say attorneys are not cutting fees. In your obvious bias, you made that up. My guess is they they ARE cutting fees to help make a bad situation less bad. Third, the bad guys, DOCTORS AND HOSPITALS, get to keep the fruit of their unconscionable behavior by seeking bankruptcy protection. Fourth, the only solution you see is one that punishes the victims and the lawyers and allows the perpetrators to escape with nary a dime coming out of their pockets. Now, what part of your position do I mis-state?

  13. jc says:
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    Well if some attorneys are cutting there fees, I applaud them for their humanitarian effort, but on this site, you are the first one to mention that some lawyers are cutting fees. The bad guys do not get to keep the fruits of their bad behavior because they are declaring bankruptcy and the bankruptcy court will seize assets to pay creditors. I also am not a lawyer, but I do not believe that ill gotten gains obtained by fraud can be protected in bankruptcy. So Jon what do you want to do to Dr. Panos and St. Francis Hospital? Dr. Panos and St. Francis Hosp have agreed to settle for insurance limits (they had insurance). Dr. Panos and St. Francis will declare bankruptcy and forfeit assets. If there was fraud, Dr. Panos and responsible people at St. Francis should be criminally liable. Dr. Panos will not be able to practice medicine again. I do not know what other punishments you can meet out to these people. We don’t have lynch mobs anymore. The fact of the matter is that injury compensation is rarely complete. If a drunk driver without insurance hit me and severely disabled me, I can sue the driver, but if he has no assets, I am stuck. It is sad, it is wrong, the drunk driver did not completely have to pay for my injury, but I am stuck. Society will have to pay to help with my disabilities in that instance.

  14. Jon says:
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    No question that what you say is true. Recoveries are, almost always, limited in situations like this. THAT IS EXACTLY THE POINT. While you constantly rail on about “greedy lawyers” and “high fees”, the fact is that most case recoveries AND FEES are limited by insurance limits, tort reform, and lack of assets (bankruptcy or not) available from the defendant. You talk of so-called “frivolous lawsuits”, but in the same breath seek protection for wrongdoers in serious ones. You essentially look for solutions in search of problems. The REAL problem is that victims are generally uncompensated because of these types of limits. Bad conduct is rarely severely punished. This is primarily because deep pocket defendants have more political clout, especially in red states, than those who suffer from their misconduct. I understand that you are a doctor, perhaps one who has been sued for no reason, but abuses cut both ways and you refuse to acknowledge the substantial abuse of the system by deep pocket defendants who use money and power to tip the scales of justice in their favor. Whether they do that legally or illegally is besides the point. It is still questionable, greedy, behavior. These defendants are far more greedy than any trial lawyer that I have come into contact with. Come to the light, my brother.

  15. jc says:
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    Jon, it does cut both ways and doctors are abused more often by frivolous malpractice suits then victims are by the doctors and hospitals. I believe there are legitimate ways to alleviate these abuses–medical courts! Instead of having a judge who knows nothing about medicine evaluate these case, have a medical pannel evaluate these case and render a decision. Could be done in 6 months at a fraction of the litigation cost and it could exonerate good doctors and compensate deserving patients. Right now, a patient has to have an injury worth >$150K in order to go thru current corrupt medical malpractice system. Medical courts could do that for a third of the fee, allowing more patients with lesser injuries to have their cases heard and get compensated. As an aside, I have personally seen plaintiff attorneys continue to pursue a case long after it has become obvious that there was no malpractice. I guess they are hoping the doctor will give in and throw some money their way to be done with the lawsuit.

  16. Jon says:
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    Dr. Cox: Same old tired garbage from you. Medical courts are one more method of restricting punishment for wrongful conduct. As I pointed out, you already have tort reform; you already have policy limits,; you already have bankruptcy. That’s not enough for you. Now, you want doctors to assess damages to victims of other doctors. In other words, you want the wolf to guard the hen house. And all of your ridiculousness started when I asked you whether it was right for doctors to avoid full accountability for terrible conduct by extorting a policy limits settlement using bankruptcy. Instead of providing a direct answer, you, in typical fashion, bashed lawyers and defended this extortion. Then, you got offended when I called this “crap”. You have absolutely no credibility on these issues. Your bias is palpable. The only way to stop bad conduct is to severely punish it. When you pass measures to limit punishment, you encourage bad conduct. This is a simple concept, one which you, in your hatred of lawyers, are blind to. Again, shame on you, sir. My wish for you is that you find yourself, one day, to be a plaintiff in the system you advocate.

  17. jc says:
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    Jon, I do not know how anyone but a plaintiff’s attorney can defend the current corrupt medical malpractice system. Do you realize that it typically takes 3 years to a decade to resolve these cases? Did you know that it costs >$150K for the plaintiff to bring a malpractice case to court? This Dr. Panos case is the rare exception, not the rule because 85% of trial verdicts are in favor of the defendant doctor! I think we can significantly improve on the current system. What is wrong with having a medical court system which can adjudicate cases in 6 months instead of 3-10 years, at a fraction of the cost. Some people have legitimate claims which are only worth say $50k-$75K—in our current system, those cases are economically not viable and do not get heard. These people get victimized twice, once during the injury and a second time when a plaintiff attorney won’t take the case. Innocent doctors deserve a speedy hearing of their case so that they can be exonerated. Instances like these are the majority of cases and they are not being addressed by our current corrupt medical malpractice system.