The Naples, Fla.-based hospital system completed negotiations to purchase the 231-bed Trinity Hospital of Augusta for $75 million in December 2005 and made public announcements of its intentions, according to the report. The for-profit Health Management signed a nonbinding letter of intent and even began training the hospital’s staff. But when Health Management CEO Gary Newsome took over, he decided against the deal and didn’t sign the asset-purchase agreement.
After the hospital sold in a separate deal for $37 million to Nashville, Tenn.-based Community Health Systems, its board sued Health Management for the $38 million difference. The court’s ruling in favor of Health Management derived from conditional wording in documents the system signed, which required the Georgia attorney general to approve the deal before a binding asset sale would occur, according to the report.
Since Health Management killed the deal one day before the AG had scheduled a public hearing on the matter, the court found Health Management had not violated the law in pulling out of the agreement.
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