ST. CROIX — A federal judge in the Virgin Islands has ordered the creditors who won a $6.36 million default judgment against Governor Juan F. Luis Hospital and Medical Center to explain what legal authority allows them to seize the hospital’s assets, saying the basis for their request is unclear.
Chief Judge Robert Molloy, of the U.S. District Court of the Virgin Islands, St. Croix Division, issued the order Thursday in a miscellaneous case, in which the plaintiffs seek to execute on the judgment. The defendants are JFL and the Virgin Islands Government Hospitals and Health Facilities Corporation (VIGHHFC), the public corporation that manages the territory’s public hospitals.
The plaintiffs, VFI KR SPE I LLC and Varilease Finance Inc., filed a praecipe, a request asking the clerk to instruct the marshal to seize all funds in the defendants’ Banco Popular accounts and all other pledged or liened assets listed in an exhibit.
Molloy wrote that before issuing a praecipe, the court must be satisfied that a judgment creditor is permitted to execute on the debtor’s assets. He cited a Virgin Islands law, 19 V.I.C. § 245b, that exempts all property of VIGHHFC, including funds, from judicial process of every kind, including attachment, levy, execution and sale. The law also says no judgment is a lien or charge against the corporation’s property or funds. The statute includes an exception saying the exemption does not limit the right of the corporation’s creditors to foreclose on a mortgage or other security, or to enforce a lien or pledge on its revenues. The order quotes that language but does not say whether it applies here.
Molloy wrote that, in light of the statute, it is unclear what authority the plaintiffs rely on. He ordered them to file a brief, with citations to legal authority, by November 13 explaining the legal basis to execute on VIGHHFC’s assets. The order does not rule on the seizure request.
In a footnote, Molloy noted that the Michigan court appears to have exercised jurisdiction based on diversity of citizenship. He wrote that under Third Circuit law the government of the Virgin Islands is not a citizen for diversity purposes, and that it is unsettled whether VIGHHFC is an alter ego of the government, which would affect whether its citizenship can be used to establish diversity. He said the issue is highly fact specific and would be better resolved in an adversarial proceeding. Because the defendants have not entered an appearance in the Virgin Islands case, he said, the court will not address it at this time.
Federal default judgment against St. Croix hospital:
The judgment came from the U.S. District Court for the Eastern District of Michigan, which entered a default judgment of $6.36 million against VIGHHFC and Governor Juan F. Luis Hospital and Medical Center.
The plaintiffs sued in Michigan on March 31. The complaint alleged the defendants breached a master lease agreement and accompanying schedule for medical equipment with a total equipment cost of $6 million. Under the lease, which had a 48-month base term beginning April 1, 2025, monthly rental payments were set at $149,400.
The plaintiffs alleged the defendants did not pay the full rent for November 2025 and made no payments for December 2025 through February. They also alleged the defendants failed to provide required financial statements for fiscal years 2021 through 2025. The plaintiffs sent a default notice on February 27 and asked for the equipment to be returned. The complaint said the defendants neither cured the defaults nor returned the equipment.
The complaint put the amount owed at $6,357,600, made up of $507,600 in unpaid amounts and a stipulated loss value of $5,850,000 as of February 27. It asserted four counts: breach of lease, claim and delivery, foreclosure of a security interest, and specific performance. The plaintiffs also cited a Uniform Commercial Code financing statement filed May 7, 2024, with the Office of the Lieutenant Governor covering the defendants’ assets. The filing is the public record of the security interest granted in the lease, and it was the basis for the plaintiffs’ foreclosure claim and the court’s order allowing them to take possession of the defendants’ assets in addition to the money judgment.
The equipment listed in Exhibit 1 to the complaint includes sterilization and instrument-reprocessing systems, Intensive Care Unit and birthing beds, ventilators, patient monitors, laboratory analyzers, operating room equipment, neonatal incubators, autopsy and morgue equipment, commercial kitchen equipment, and a 75-kilowatt generator, along with furniture, fixtures and supplies. The list also includes shipping and installation charges for certain categories.
The clerk entered default against the defendants on May 6, after they failed to answer the complaint. The plaintiffs moved for default judgment on May 29. According to the court’s order, the defendants did not appear at the September 21 hearing, though notice had been properly served.
On September 22, District Judge Brandy McMillion granted the motion. The order entered a money judgment of $6,357,600 in favor of the plaintiffs and provided for interest at 13% per year until paid, as provided under Michigan law. It also awarded $22,250 in attorney fees and $2,388.88 in costs.
The order directs the defendants to return all equipment identified in the complaint within 30 days of the judgment. It also forecloses the plaintiffs’ all-asset lien against the defendants’ assets and states that the plaintiffs are entitled to immediate possession of those assets. The money judgment is to be reduced by the resale value of any equipment returned or seized and delivered to the plaintiffs. The court described the order as final and closing the case.
Lawmakers respond:
Two senators issued statements on Wednesday demanding answers about the hospital’s handling of litigation.
Senate Vice President Kenneth Gittens called the Michigan judgment “totally unacceptable and inexcusable.” He noted that the hospital has appeared before the Legislature at least three times since the suit was filed on March 31, twice before the Committee on Health, Hospitals and Human Services and once before the Committee on Finance for budget hearings. He asked how the hospital and its governing corporation came to ignore the lawsuit and miss the federal hearing. Gittens also called on the attorney general, whose office represents the government, to explain publicly what legal action was taken on the hospital’s behalf, why the defendants did not respond or appear, and what is being done about the judgment. He tied the matter to the administration’s request for legislative approval of a $250 million bond-financing package that includes funding for the hospitals.
Senator Ray Fonseca, chair of the Committee on Health, Hospitals and Human Services, said in a separate release that he is demanding accountability from the merged hospitals’ leadership over its failure to disclose a lawsuit involving JFL. Fonseca said CEO Darlene Baptiste did not inform him of the matter and that he understands some hospital board members were not notified either. He called for an immediate explanation from Baptiste of when the action was initiated, who authorized it, which board members were informed, and why the Senate Health Committee was not notified. He also renewed his call for the governor to declare a state of emergency for the territory’s hospitals.
Staffing firm sues SRMC over unpaid invoices:
Separately, a healthcare staffing company has filed suit against Schneider Regional Medical Center in Superior Court, alleging the hospital failed to pay for services provided under a 2025 contract.
Send-It Healthcare, Inc., a Delaware corporation, filed a verified complaint in the Superior Court of the Virgin Islands, Division of St. Thomas and St. John, on October 27, 2026. The complaint names Schneider Regional Medical Center as the sole defendant and asserts one count of breach of contract. Attorney Christopher Kroblin, of Kroblin D’Andrade P.C., represents the plaintiff.
According to the complaint, Send-It operates an internet-based platform that lets hospitals and other healthcare companies search listings of medical providers available for temporary assignments, review their backgrounds, availability and pricing, schedule them directly, and set compensation terms. Once an appointment is scheduled, the company also arranges travel logistics and provider credentialing.
Send-It states that it and SRMC entered into a Staffing Services Agreement in April 2025.
The complaint alleges that SRMC has not paid numerous invoices, most of them more than 91 days past due. Under Section 4.2.3 of the agreement, SRMC was required to pay each undisputed invoice within 15 business days of receipt. The same provision, as described in the complaint, treats an invoice as accepted, and any right to dispute it as waived, if the hospital does not dispute it in writing within that period. Send-It alleges SRMC did not dispute the invoices in writing. Section 4.2.4 provides that late charges accrue interest at 1.5% per month.
The unpaid balance includes travel and lodging expenses tied to provider assignments, an unpaid professional-fee invoice for a provider identified as Forgione, and the unpaid portions of professional-fee invoices for a provider identified as Pitafi. The complaint does not state a total dollar amount, saying only that damages will be shown at trial.
Send-It alleges that SRMC has indicated it is withholding payment for some travel and lodging expenses because of internal expense caps. The complaint says the agreement does not contain those caps and that SRMC’s internal policies do not excuse payment. It states that the initial Forgione confirmation sets no dollar limits on travel or lodging and requires only that travel be booked at the lowest-cost option. It further alleges that a physician, named in the complaint only as Dr. Rosenberg, approved a $130-per-day lodging rate for Forgione in writing on August 29, 2025. The complaint also alleges SRMC is withholding payment in bad faith.
Send-It seeks contractual and consequential damages, reasonable costs and fees, interest, and any other relief the court deems appropriate. SRMC had not filed a response as of the date of the complaint, and the case number had not yet been assigned.
Second lawsuit over older SRMC debt:
A separate complaint over unpaid SRMC bills was filed in September by Worldwide Travel Staffing Ltd., the New York company that won a $12.1 million judgment in March involving JFL.
READ MORE: Judge orders territorial hospital board to pay $12M to travel nursing company in decade-long dispute
The complaint, dated September 23, was filed in Superior Court, St. Thomas Division. It names VIGHHFC as the sole defendant and seeks $166,846.90 plus interest.
Worldwide says it entered into a Master Staffing Agreement with SRMC on or about April 18, 2014, to recruit nurses, certified nursing assistants, and other professionals. The complaint says both sides performed for a period, after which the hospital began making incomplete payments. SRMC issued a check for $74,855 on or about October 18, 2019, and Worldwide says it received no further payments after October 2019. Worldwide says it has sent weekly finance-charge notices, most recently on September 21, and that interest is accruing at $577.55 per week. The complaint does not state a total interest figure.
According to the complaint, an SRMC accounts payable specialist contacted Worldwide’s chief operating officer on October 16, 2025, about reconciling the account, and the two exchanged financial information through January 9. On January 7, the hospital acknowledged the debt and said Worldwide would be updated once a payment date was finalized, the complaint states. Worldwide alleges it received no payment date and no response to a second formal demand for payment sent April 20.
The complaint names VIGHHFC rather than SRMC. It alleges that the corporation, under 19 V.I.C. § 244, delegates contracting power to individual facilities such as SRMC and is therefore liable for their obligations. It asserts three counts: breach of contract, promissory estoppel, and quantum meruit. Worldwide asks for judgment of $166,846.90, interest at the maximum legal rate, costs and attorneys’ fees.
Earlier judgment, and a petition to enforce it:
The Michigan judgment is not the only large money judgment against the St. Croix hospital. In March, Superior Court Judge Ernest Morris Jr. entered a final judgment of $12,137,664.84 against the hospital in favor of Worldwide Travel Staffing Ltd., a New York-based travel nursing company, ending a case filed in 2014 over unpaid bills at JFL.
Worldwide began supplying nurses and other healthcare professionals to the hospital under a 2005 agreement capped at $2 million. Court records show the hospital never made a timely payment. Over the following years its chief executive signed a series of promissory notes acknowledging the debt, including one for $300,000 in 2010, and by November 2011 the hospital owed nearly $3.75 million. The hospital paid Worldwide a total of $13.4 million over the life of the contract but stopped paying in May 2013. Worldwide pulled out that November with an unpaid balance of $4,220,704.35.
The judgment consists of that principal, $7,894,688.34 in prejudgment interest, $21,132.50 in attorneys’ fees, and $1,139.65 in costs. Morris found the hospital has no independent legal identity under a 2018 Virgin Islands Supreme Court ruling, so the territorial hospital board was the proper defendant. The VIGHHFC, represented by the Office of the Attorney General, did not respond to Worldwide’s motion for summary judgment, and the court accepted Worldwide’s version of the facts. The company calculated interest at a flat 15% rather than the higher tiered rates in the parties’ agreement, a difference the court put at no less than $1.78 million.
On September 23, Worldwide filed a petition for a writ of mandamus in Superior Court in St. Croix asking the court to order VIGHHFC and its officers and board members, named in their official capacities, to take the steps needed to pay the judgment. The petition says no stay was entered and no appeal was filed within the 60-day period. It also says Worldwide sent a written demand on August 18 and has emailed weekly interest calculations to the hospital since about 2014. It puts the balance, with post-judgment interest at 4% per year, at approximately $12,369,837.28 as of September 21.
Worldwide argues that mandamus is its only remedy because Virgin Islands law exempts the corporation’s property from attachment, levy and execution, and provides that a judgment is not a lien on its property or funds. If funds are not immediately available, the petition asks the court to direct the respondents to seek a legislative appropriation or to negotiate a payment schedule in good faith. It also asks that they be required to file a report within 30 days describing the steps taken.
