CHS subsidiary sues Georgia hospital for $5M over failed transaction

Community Health Systems Professional Services Corporation, a subsidiary of Franklin, Tenn.-based Community Health Systems, has filed a lawsuit against Columbus, Ga.-based St. Francis Hospital over a deal that collapsed last month, according to a Ledger-Enquirer report.

St. Francis began exclusive talks with CHS in April, but the hospital ended those discussions July 29. At that time, St. Francis said it was not in exclusive talks with any company. However, the following day, the hospital announced it had signed a letter of intent to be acquired by Brentwood, Tenn.-based LifePoint Health.

CHSPSC is now seeking to recover more than $5 million invested in the deal to take over the financially troubled hospital.

CHSPSC claims St. Francis "has intentionally hidden and lied about material facts regarding the hospital's problems," according to court documents. CHSPSC further alleges that the hospital "made these misrepresentations intentionally to induce CHSPSC into a deal and specifically into fronting St. Francis the $5 million."

A St. Francis spokeswoman, Amy Adams, told the Ledger-Enquirer that the hospital will "deny and rigorously defend itself against any public accusations by CHS."

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