Pineville Community Health Center directors Dennis Varghese and Sheryl Richter will continue to serve as the leadership of the hospital after a federal judge denied an injunction filed by the hospital’s former CEO and director Michael and Natalie Frey seeking to be reinstated.
WRIL obtained a copy of United State District Judge Robert E. Weir’s ruling, which was handed down Wednesday morning in London.
The future leadership  of the hospital has been uncertain for several weeks. The Freys filed a preliminary injunction on behalf of PCHC, seeking reinstatement to their respective positions as President/CEO and Director of the hospital in December. The injunction also requested that the court freeze $7 million in allegedly misappropriated funds and compel the current directors, Varghese and Richter, to provide the necessary accounting for Medicare reports due by December 2nd.
The hospital released a statement indicating that on November 27, 2024, Michael Frey was removed from his position along with other personnel. This was after the Freys discovered they no longer had access to any PCHC bank accounts.
On January 10, both parties presented their cases to Judge Wier during a hearing at the London District Court. Wier denied the injunction on Wednesday morning.
In a 19-page opinion, the judge concluded that the Freys’ likelihood of success in obtaining the injunction was insufficient, both procedurally and on its merits. He noted that the hospital’s bylaws were amended in February 2023, granting the Act Abroad Group (AAG) centralized authority to appoint the Board. At that time, Sheryl Richter was selected as a member representative.
According to WRIL’s summary of the opinion, Richter removed the previous board then appointed herself, Varghese, and Natalie Frey to the new board and designated Varghese as chairman in April 2023. They later entered into an agreement with Frey Consulting, resulting in Michael Frey being hired as President and CEO of PCHC in 2024. The judge determined that the termination of their positions was permitted under the bylaws, which the Freys were aware of. He also stated that a statute provides for the removal of an officer when it is believed to be “in the best interests of the corporation.”
Judge Wier remarked that the Freys’ claim of “irreparable harm” if they were not reinstated lacked sufficient evidence of the detrimental effects their absence would have on PCHC. He also stated that the Freys did not provide proof that the hospital had declined since their departure.
Regarding the $7 million in question, the judge noted that it had been transferred nearly 14 months before Michael Frey became CEO, and since then, the hospital had shown no signs of financial instability. While the judge acknowledged the dispute over the funds as significant, he did not find it irreparable based on the current record.
Additionally, the judge described concerns over the Medicare report as “largely overblown,” especially given that the last filing under Michael Frey’s supervision was six months overdue. He pointed out that the Freys offered “no reason to believe that the current delay will result in certain and immediate financial distress for PCHC.”
The hospital provided WRIL a response to Wier’s order denying the injunction saying:
“Pineville Community Health Center is pleased with the favorable ruling denying Michael Frey’s motion for an injunction to regain leadership. This outcome reaffirms our commitment to serving our patients, staff, and community with integrity. We trust the legal process and remain optimistic about timely resolutions to all outstanding matters.
This decision strengthens our resolve to provide exceptional healthcare while fostering a safe, supportive environment for everyone who depends on us. We deeply value the trust of our patients, employees, and community partners and look forward to continuing our mission to deliver outstanding care to Pineville and the surrounding region.”
It’s unknown at this time what the next step will be for Michael and Natalie Frey.