CHS wins case over hospital's 'as-is' sale

A hospital that Tower Health acquired from Community Health Systems was in compliance with state and federal licensing at the time of the transaction, according to a Sept. 6 opinion from a Pennsylvania federal court. 

West Reading, Pa.-based Tower Health sued Franklin, Tenn.-based CHS alleging CHS breached an asset purchase agreement the parties entered into in 2017 for the sale of five Pennsylvania hospitals. Tower Health alleged CHS breached the agreement by selling one of the hospitals — Pottstown (Pa.) Hospital — in a noncompliant condition. 

The court issued its opinion after a 19-day bench trial that concluded last summer. The court determined that the hospital, which was sold in "as is" condition, was "in compliance" with CMS conditions of participation and relevant Pennsylvania licensure requirements prior to the closing of the agreement. CHS did not breach the agreement, the court said.  

The court ruled that CHS is entitled to reasonable attorneys' fees and costs in the case as the prevailing party. 

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