Doreen Granpeesheh was on vacation in Costa Rica with her family when she heard the news that she won her bid to repurchase the Center for Autism and Related Disorders, a chain of autism therapy clinics she founded in 1990, grew into a national chain and sold to private equity giant Blackstone five years ago. She’d flown from Manhattan, where the auction was held in-person, to the Central American country for a pre-planned trip on July 20, the fourth day of a five-day auction—she didn’t realize the auction would stretch as long as it did—and finished the bidding process remotely last week.
On Wednesday afternoon, Granpeesheh’s winning bid—a $48.5 million cash package that included over $25 million of her own money, $10 million from former CARD managing director Sangam Pant and $11 million from private equity firm Audax, according to Granpeesheh—received bankruptcy court approval. That purchase price is double the initial bid from Granpeesheh and Pant of $25 million but far less than the $300 million payout Granpeesheh had received when selling CARD to Blackstone five years ago.
“It was such a relief, I was shaking and crying and laughing out loud, you know, like, really like laughing as if I’ve seen a comedy scene or something, and feeling so emotional,” Granpeesheh says.
Granpeesheh, age 60, stepped down as CARD’s CEO in 2019, after nearly 30 years at the company’s helm, and left the board in 2022 because 40 years dedicated to one field is “long enough,” she wrote in January. But that was before CARD filed for bankruptcy in June, and things have, clearly, changed.
Her winning bid beat out two other bidders, both from private equity firms with investments in autism treatment organizations: Audax and Lorient. A couple of days into the auction, Granpeesheh and Pant ended up partnering with the smaller of the two entities, Audax, which owns treatment centers and schools mostly in Virginia that operate under the names Your Life ABA and Proud Moments ABA—in hopes of outbidding Lorient and its autism therapy firm Behavior Frontiers.
Granpeesheh, who is one of America’s richest self-made women, is worth an estimated $350 million,thanks to CARD’s sale to Blackstone. Using some of those proceeds, Granpeesheh raised her part of the bid from $15 to $27 million in what she called a“frustrating” process that ran from 9 a.m. to nearly 9 p.m. each day for five days and included bidders’ need to up their offers on numerous occasions. Lorient ended up as the backup bid, which will go into effect if Pantogran—the partnership between Granpeesheh and Pant—and Audax can’t come up with the $48.5 million in funds. (Initially Livingstone, CARD’s investment banker, contacted 84 potentially interested entities after the company’s Chapter 11 petition.)
Court filings say CARD will keep all of its 130 centers open after the sale, although Granpeesheh says 18 of the centers, including all Virginia centers, as well as clinics in New York, New Jersey and Nevada, will go to the Audax-affiliated entities, which will split off from CARD. That will leave CARD with 112 centers, down from its 2018 peak of 265 clinics, and likely treating less than half the 7,000 patients it saw five years back.
In the last couple of years, CARD has struggled due to the pandemic, higher labor costs, changes in insurance payout policies, staffing shortages and, according to four former employees, a model that put profits ahead of patient care—which ultimately led to the company’s June 11 bankruptcy filing. Now, even with $18 million in loans to carry it through bankruptcy proceedings, CARD projects it will run out of cash by August and will need additional funding. In the 12 months through April 2023, CARD posted revenues of at least $160 million but lost $82 million. Granpeesheh says she’s willing to put up additional personal funds, much of which came from CARD’s 2018 sale, to keep the company going.
Chapter 11 bankruptcy cases usually take several months or even years. Throughout the process thus far, representatives of CARD and U.S. bankruptcy judge David Jones stressed the urgency of CARD’s bankruptcy case. Court declarations and transcripts repeatedly cited CARD’s low cash reserves ($2 million when it filed for bankruptcy on June 11) and that the company is an important and sensitive asset, since CARD centers the medical treatment of young children.
“Not only does [CARD] provide jobs and fill a spot in the market, it also provides a very valuable service to a segment of our population that needs help,” Jones said in Wednesday’s hearing. He also said he was pleased with how quickly and smoothly proceedings have gone so far and expressed surprise that the auction had managed to double CARD’s original sale price.
Granpeesheh knows that getting CARD to break even again won’t be easy and has plans to help the company “be lean.”
Between now and when she takes over again on August 25, Granpeesheh and Pant say they will interview the approximately 200 corporate employees to decide “who’s staying with us,” she says, while stressing that she plans to keep all clinic-based staff. They will also review all of CARD’s vendor contracts and decide which to keep, hoping to “reduce expenses as much as possible.”
Additionally, Granpeesheh believes she’ll be able to help the company by increasing morale and cultivating employees’ sense of ownership in the company, although she doesn’t exactly know what that will look like yet.
She plans to spend the next year flying around the country to visit every CARD location in person and talk to employees about what challenges they’re facing. Additionally, she plans to reinstate the weekly “CEO call” she used to hold, where anyone in the company can join and ask questions—although she stresses she doesn’t yet know what her title will be this time around: “I just want to talk to people, listen and explain things.”
Granpeesheh still wants to open new CARD clinics, eventually, but she acknowledges that she can’t rush to grow this time around like she did in the past. “It’s a matter of getting to know the newest generation of CARD workers and not putting too much pressure on growing fast.”
Through all of this, and in addition to CARD’s lack of funds, Granpeesheh will continue to face industry-wide struggles in recruiting and retaining therapists and have to keep responding to criticism that the type of intense therapy CARD deploys—which reinforces certain behaviors and tries to eliminate others—can make some kids feel miserable and can correlate with lower self-image when they’re adults. Granpeesheh, for her part, says it’s “sad to hear there are still so many critics.”
Still, Granpeesheh remains hopeful, even while acknowledging that it’ll be an uphill battle.
“It doesn’t feel like a challenge, because I built it,” she says. “It doesn’t feel scary, it feels exciting.”