The 11th Circuit U.S. Court of Appeals has ruled Health Management Associates did not owe restitution to Trinity Hospital of Augusta (Ga.), formerly St. Joseph Hospital, for declining to buy the hospital's assets after publicly announcing it would in 2005, according to a report by the Augusta Chronicle and Morris News Service.
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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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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