NASHVILLE, Tenn. – A prominent Tennessee doctor who saw a chance to make money off lawsuits is alleged to have lied to a business partner who is now suing him.
Ross Buntrock sued Dr. Harry Jacobson last week in federal court over financial troubles at a business called MedLegal, which, along with MedLogic, was created to pursue mass-tort claims. Buntrock had seen new technology and Jacobson’s status in the medical community as a “once-in-a-lifetime opportunity.”
But Jacobson was hiding debt from other business ventures, the suit claims.
“As his financial troubles continued to pile up, Dr. Jacobson eventually sought to leverage the assets of the fledgling mass tort-focused businesses to solve his debt problems,” the suit says.
“The plan was to obtain a significant loan using the mass tort cases being pursued by MedLegal as security.”
Buntrock is a D.C. lawyer who met Jacobson in 2018 and was wowed by Jacobson’s past success in the business world, which included co-founding and selling Renal Care Group to Fresenius for approximately $4 billion in 2005.
Buntrock was convinced to take over Jacobson’s iCitizen in Nashville. The company had serious money problems that resulted in an agreement to shut it down, and the two pivoted to a company called Civotek, for which Buntrock claims he paid $27,000 out of his own pocket to cover business expenses like rent.
In 2019, Ray Capp came on board with the idea for MedLogic and MedLegal. Capp’s group was planning to start a mass tort law firm that utilized insurance payer data to find clients.
Once the businesses were established, Buntrock says he suggested using relationships with physicians rather than insurance data to identify potential clients. Overhead was large, the suit says, considering the technology, staff, relationship and marketing that were needed, plus the cost of pursuing cases.
By 2020, MedLogic was receiving referrals from doctors. But Jacobson and Capp were allegedly misappropriating its assets to pay preexisting debts, the suit says, or to “temporarily solve liquidity problems at other businesses that relied upon Dr. Jacobson for funding.”
PPP funds during the COVID pandemic were earmarked to Civotek but were rerouted to Jacobson, it is alleged. In 2021, MedLogic and MedLegal obtained a $2 million line of credit from Bankwell, with assurance from Jacobson that he would retain at least $10 million in liquid assets.
The money ended up paying other debts for other companies, Buntrock says.
“Staff were not being paid on time,” Buntrock claims. “Operating expenses went unpaid. The businesses that had shown significant promise quickly began to deteriorate.”
In court, MedLegal had received $192,000 from a mass tort settlement, but Jacobson took that money too, the suit says. Bankwell ultimately sued over the $2 million loan in Connecticut federal court.
Using the value of its portfolio of mass tort cases, MedLegal obtained a loan from Legalist that included a $500,000 annual fee and 27% interest rate.
The final straw, Buntrock says, is a lawsuit over a loan to MedLegal he was never informed about. He called for the resignation of his three partners, who agreed. The Legalist loan is now more than $4 million and growing, leaving Buntrock personally responsible for it.
Buntrock is represented by J. Isaac Sanders of Womble Bond Dickinson.
