(Bloomberg) -- Three former directors of Cano Health Inc. called for the company to replace Chief Executive Officer Marlow Hernandez and improve governance, according to a letter reviewed by Bloomberg. 

Barry Sternlicht — the billionaire CEO of Starwood Capital who took Cano public through his blank-check vehicle in 2021 — together with Elliot Cooperstone and Lewis Gold said in a letter on Monday that the company should sell its non-core businesses to focus on profitability. 

The group also called for the company, which operates primary care facilities and supports medical practices that cater to seniors, to consider strategic options including a complete sale, the letter showed.

The non-core assets could be valued at about $300 million to $500 million and include clinics in Texas, Nevada, New Mexico, Illinois, California and Puerto Rico, people with knowledge of the matter said.

Debt, Burn Rate

In the letter, the former directors said Hernandez was “materially indebted” to the company’s chief operating officer and transferred 20 million shares as a loan repayment.

The former directors also said that the company had burnt though over $500 million in capital raised through the SPAC transaction as well as an additional $1 billion in debt partly on “ill-conceived acquisitions,” the letter showed.

Representatives for Cano didn’t immediately respond to requests for comment. 

Sternlicht, Cooperstone and Gold collectively own about 36% of the company’s stock. Sternlicht’s SPAC Jaws Acquisition Corp. took Cano public during the vehicle’s heydays before he resigned in March, citing “fundamental disagreement with management.”

At that time, Cano said in a press release Sternlicht’s resignation was “particularly reckless” and that the board and management team “strongly disagree” with the resigned directors’ assessment of Hernandez.

The group also claims that Hernandez allegedly used his role to enrich his family, including paying $23 million to a company controlled by his father for general contractor work and $8.5 million paid to a company owned by his wife for dental services.

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