The former CEO who oversaw five Florida hospitals is facing a lawsuit over access to the hospitals’ bank accounts, while a separate legal dispute alleges a broader fight over control of the system.
Here are seven things to know:
1. The lawsuit was filed March 5 by HSA Florida Physician Group and HSA’s five Florida hospitals: Palmetto General Hospital in Hialeah, Coral Gables Hospital, Florida Medical Center in Fort Lauderdale, North Shore Medical Center in Miami and Hialeah Hospital. It was filed in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Fla., with Michael Sarian and City National Bank of Florida as defendants, according to court documents reviewed by Becker’s.
2. In the complaint, the plaintiffs seek a declaration that Mr. Sarian has no authority over the accounts and injunctive relief directing City National Bank to remove him as a signatory and prohibit him from accessing the system’s funds. They are seeking declaratory and injunctive relief, with the amount in controversy exceeding $750,000.
3. On March 13, Circuit Court Judge Thomas Rebull ordered City National Bank to remove Mr. Sarian as an authorized signatory, user or representative of the accounts, and ordered Mr. Sarian to be temporarily restrained from accessing the funds in the accounts.
4. The board removed Mr. Sarian from his role as board chairman and CEO of HSA America-Florida on March 3 after he allegedly removed funds from HSA Corp.’s bank account “in an unexplained manner,” the complaint said.
5. The bank accounts receive patient care funds primarily from government and commercial payers and are used to conduct daily hospital operations such as payroll and vendor obligations. After his removal, Mr. Sarian allegedly instructed City National Bank to remove other signatories and add improper signatories of his own to the accounts. These requests were made despite his authority over financial institutions being revoked as part of his removal, the complaint said.
6. HSA Florida System entered into a master lease agreement and related financing agreements with Medical Properties Trust in September 2024. Medical Properties Trust is not involved in the litigation, it said in a March 10 statement.
“Separately, we have sent certain ordinary course legal notices to HSA intended to protect our legal interests,” the statement said. “We do not expect this situation to impact rent collections moving forward and, in fact, HSA is fully current on rent owed.”
7. HSA Florida said in a statement shared with Becker’s on March 16 that it is confident the legal dispute will be resolved in the near future.
“While this is ongoing, we want to reassure our patients, staff, and the communities we serve that the current dispute has no impact on our clinical operations,” the statement said. “Our hospitals remain fully operational, and our commitment to excellence in healthcare is unwavering.”
Becker’s has reached out to City National Bank for comment and will update this story if more information becomes available.
Mr. Sarian’s lawsuit
Mr. Sarian filed a separate lawsuit Feb. 24 in the Los Angeles County Superior Court against defendants affiliated with the companies, alleging what he describes as a “coordinated extortion-and-takeover scheme” tied to control of the hospital system.
Mr. Sarian is the founder, CEO, chairman and sole or majority shareholder of American Healthcare Systems Corp., NOR Healthcare Systems Corp. and Healthcare Systems of America Corp., which together operate 19 hospitals across multiple states, according to a March 17 news release on behalf of the plaintiffs, which includes Mr. Sarian and the three corporations.
The complaint alleges Aramais Paronyan, MD, a minority shareholder and director of AHS and NOR, and in-house legal counsel Faisal Gill participated in efforts to remove Mr. Sarian as CEO, restrict his access to company systems and finances, and attempt to assume control of operations across the system.
The defendants include Dr. Paronyan, Mr. Gill, Family Health Care Partners, which holds a 49% stake in AHS, and Does 1-20.
The lawsuit alleges Dr. Paronyan and Mr. Gill engaged in civil extortion, including demanding and obtaining money and property from Mr. Sarian and AHS through threats and coercion, according to the complaint. The complaint also includes claims of intentional infliction of emotional distress, breach of fiduciary duty and breach of duty of loyalty, as well as assault claims against Dr. Paronyan.
The plaintiffs are seeking damages, restitution and declaratory relief, among other remedies.
The defense’s response
In court filings, attorneys for the defendants argue, citing a declaration from Mr. Gill, that the dispute stems from alleged financial misconduct rather than a takeover attempt, including alleged transfers totaling more than $50 million and millions in unpaid payroll tax liabilities.
The filings say the board acted in response to financial risks and fiduciary obligations and opposed efforts to block leadership changes through an emergency court order. In their opposition to the temporary restraining order application, attorneys wrote that Mr. Gill became COO about a year ago and began identifying irregularities in cash management while reviewing company financial records.
They also argue the situation does not warrant emergency intervention and that the lawsuit seeks to interfere with ongoing corporate governance.
Los Angeles County Superior Court Judge Curtis Kin denied the plaintiffs’ request for a temporary restraining order on Feb. 25, according to court documents.
Editor’s note: This story was updated at 4:19 p.m. Central time on March 20 to include information on the lawsuit filed by Mr. Sarian.
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