But the nonprofit asked the judge to hold off on appointing a receiver, arguing that it would disrupt its healthcare services and cause more harm than good. NEON said it serves about 7,500 patients a year across a network of seven clinics and one mobile clinic. The nonprofit has served Cleveland\u2019s East Side neighborhoods since the 1970s.<\/p>\n
\u201cSimply put, NEON continues to operate and provide invaluable services to the community,\u201d it wrote. \u201cInjecting All Pro\u2019s proposed receiver at this time would severely disrupt those services.\u201d<\/p>\n
NEON has to comply with many rules and regulations in order to receive its government funding. A receiver would not have the necessary experience to avoid endangering these funds, the health center wrote in its filing. And NEON said the receiver could cut salaries and cause staff to leave.<\/p>\n
All Pro Capital hasn\u2019t responded to the latest court filing but told Signal Cleveland in June that\u00a0<\/p>\n
it \u201cbelieves the appointment of a receiver is ultimately in the best interest of NEON and its stakeholders.\u201d\u00a0<\/p>\n
The company also said that it is \u201caware of the important services that NEON provides in its neighborhoods and will be supportive of solutions that will allow such services to continue.\u201d\u00a0<\/p>\n
NEON says lender \u2018abruptly\u2019 transferred money from insurance payout<\/p>\n
NEON also blamed All Pro Capital for destroying one of the avenues to repay its debt. For months, NEON had paid its interest on-time, according to its court filing. The company said a cyberattack forced them to temporarily stop doing so \u2013 at which point All Pro Capital \u201cabruptly\u201d transferred $4.19 million out of a NEON bank account it had access to, the filing said. NEON wrote that it had been considering using these dollars, which were part of an insurance payout related to a calamitous fire, to refinance All Pro\u2019s debt with a different lender.\u00a0<\/p>\n
\u201cNot only did All Pro\u2019s action impact NEON\u2019s ability to refinance its debts, it also negatively impacted the services NEON provides to the community,\u201d the organization wrote.<\/p>\n
NEON called the terms of the loan it agreed to \u201conerous\u201d and alleged in its filing that All Pro Capital\u2019s transfer of the $4.19 million from the nonprofit\u2019s account was fraudulent. Signal Cleveland asked Patrick Rahill, NEON\u2019s attorney, what made the transfer fraudulent, but he declined to comment. NEON CEO Willie Austin and Chief Information Officer Alonzo Barker didn\u2019t return calls or emails for comment.\u00a0<\/p>\n
All Pro Capital lawyers didn\u2019t respond by the time of publication. Signal Cleveland will update this story with any comments.<\/p>\n
NEON borrows money after \u2018catastrophic\u2019 events<\/p>\n
Until last week, NEON hadn\u2019t responded in court or said publicly how the lender\u2019s request could impact its patients or services. Rahill said in court filings Friday that NEON is still able to pay its 250 employees and sustain operations at seven of its clinics.\u00a0<\/p>\n
The filing added that NEON is in discussions with \u201ctwo replacement financing lenders\u201d and that it hopes to get funding to pay off existing creditors\u2019 claims.\u00a0\u00a0<\/p>\n
Several years ago, NEON began seeking out unconventional lenders like All Pro Capital, after it suffered a series of \u201cnear-catastrophic events\u201d that caused the organization financial distress, it wrote in the court filing.\u00a0<\/p>\n
In 2023, a partner in a NEON project to open a fresh food market was convicted in federal court<\/a> of embezzling more than $800,000. A former Cleveland City Council member who championed restoring the Hough facility was sentenced to prison<\/a> for stealing from the organization. Those cases, in which NEON was listed by prosecutors as a victim, came after the nonprofit was forced to close its flagship health center in Hough after the building was destroyed by fire in 2021.\u00a0<\/p>\n The nonprofit filed a claim with the insurance company to pay for renovations, lost business and equipment. So far, though, only a portion of the insurance proceeds have been paid to NEON, and the nonprofit is in an ongoing dispute with the insurance company, NEON wrote in its filing.\u00a0<\/p>\n In May 2022, NEON borrowed $11 million from All Pro Capital. The loan was meant, at least in part, to rebuild the Hough Health Center. As NEON received insurance proceeds from the fire, it was supposed to deposit them into a bank account to which All Pro Capital had access, as a form of collateral for the loan.\u00a0<\/p>\n The loan would come due in a year. The initial interest rate on it was 11%, which later got bumped up to 14% after NEON asked to extend the due date of the loan until June 2024.\u00a0<\/p>\n \u201cInevitably and surprising to no one, NEON was unable to repay All Pro on the final<\/p>\n maturity date,\u201d NEON wrote in the July 18 filing.\u00a0<\/p>\n The organization continued to pay interest on the loan until September 2024. Earlier that year, a cyberattack by a ransomware group restricted NEON\u2019s access to its computer systems and billing software, wrote Charles Lytle, a NEON board member, in a declaration attached to the court filing.\u00a0<\/p>\n \u201cAs an unfortunate consequence of the cyberattack, NEON temporarily stopped making monthly payments to All Pro,\u201d Lytle wrote. \u201cWhen NEON tried to negotiate in good faith with All Pro, All Pro responded with even more onerous interest rates and fees.\u201d<\/p>\n In June, All Pro Capital told Signal Cleveland that NEON had \u201crefused to respond to inquiries to work out a resolution\u201d about the alleged default.\u00a0<\/p>\n After the interest payments stopped, All Pro transferred the $4.19 million out of NEON\u2019s bank account.<\/p>\n![\"Signal](\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/07\/signal-bg-semi-transparent-40.png\")
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