Filing: Spinning-chair clinic that got millions in tax money bankrupt
A North Texas chiropractic clinic that claimed to treat brain disorders by spinning people upside down in a chair has closed its doors and filed for bankruptcy protection.
A 2015 joint investigation by The Dallas Morning News and KXAS-TV found that while in office, Gov. Rick Perry steered more than $2 million in taxpayer money to the clinic to study whether the chair could help cure post-traumatic stress disorder in veterans.
Scientists called the notion nonsense and said the study was so poorly designed it was worthless. State investigators later agreed and ordered the clinic to refund some of the money.
The clinic, now known as Cerebrum Health Centers and located in Farmers Branch, closed its doors March 30 and filed for bankruptcy protection last week with more than $3.5 million in debts, including $200,000 to the state. It was previously called Carrick Brain Centers and was located in Irving.
The business “faced many challenges both in and out of their control,” said Misty Gilbert, a consultant hired last year to run the company.
Not enough patients were coming to the clinic and it couldn’t afford to pay its debts, said David Campbell, the lawyer representing Cerebrum in its bankruptcy case.
Launched in 2013 in Irving, the clinic developed a fiercely loyal following including Perry, television personality Glenn Beck, some Dallas Cowboys and former Navy SEAL Marcus Luttrell. In Facebook posts and YouTube testimonials, veterans and ordinary folks also said the clinic helped them recover from brain injuries when all else had failed.
Perry, now U.S. Secretary of Energy, visited the clinic three times as governor and urged the head of Texas’ top health agency to fund the study, through which 130 veterans received treatment for post-traumatic stress disorder.
In its bankruptcy filing, the clinic lists as investors former Dallas Cowboys safety Darren Woodson and the president of Pizza Hut, Arthur Starrs. The extent of their investment is not clear; neither responded to requests for comment.
Neither did the clinic’s former chief executive and founder Kenneth Beam, a Westlake businessman.
Torii Hunter, a former Major League Baseball outfielder who lives in Prosper, was also an investor, court records show. He said he sought treatment for a concussion, found relief and decided to make what he said was a small investment.
“I thought it worked,” he said. “But if it doesn’t catch on with the consumer, or the world, then nothing works.”
Court records and emails obtained by The News and NBC5 suggest the clinic faced financial problems for several years. A Colorado chiropractor loaned the clinic $1.5 million in 2015, court records show. He soon sued, alleging the clinic defaulted on the loan, and the clinic agreed to a payment plan.
And when the state health agency tried to recover some of its money, the clinic negotiated a payment plan, saying it couldn’t afford the lump sum of $278,000.
State representative Chris Turner, D-Grand Prairie, who pushed the state to investigate the study, said it was a shame the taxpayers stood to lose $200,000.
“I hope that state agencies learn from this unfortunate episode that contracts must not be awarded to unproven companies to fund dubious programs,” he said.