The lawsuit Dallas-based Tenet Healthcare filed against Brentwood, Tenn.-based Community Health Systems — seeking damages for the cost of CHS' attempted takeover last year — has been dismissed by a federal judge.
The lawsuit stems from November 2010, when CHS filed an unsolicited bid to acquire Tenet for $5 per share, later raising that bid to $6 and later $7.25. Tenet rejected the final offer of $7.25 in May 2010 and CHS' offer was formally withdrawn that month.
Last spring, Tenet filed suit against CHS, seeking damages for the cost of resisting a takeover bid from CHS. This was separate from the lawsuit Tenet filed against CHS in April 2011 that alleged systematic Medicare overbilling.
District Court Judge Barbara M.G. Lynn dismissed the suit seeking damages with prejudice, citing Tenet's "lack of standing" to bring the action.
In a Wall Street Journal report, a Tenet spokesperson said the court decision did not rule "on the substantive claims regarding Community Health's admission policies; rather this ruling was based on the technical issue of whether Tenet had standing, following Community Health's decision to drop its takeover attempt, to recover costs incurred during Community Health's proxy fight."
CHS President, Chairman and CEO Wayne T. Smith said the system is pleased to move forward. "We believe Tenet's board and management team initiated this litigation for the purpose of distracting shareholders from our bid to buy their company," he said in a CHS news release. "From the inception of this lawsuit, we have said there was no basis for Tenet to pursue its self-serving litigation."
Editor's note: This story was updated March 23. It initially reported that the lawsuit dismissed was that one pertaining to alleged Medicare overbilling. That lawsuit is unrelated to the suit dismissed last week.
Tenet Rejects Community Health System's Best and Final Offer
Timeline: Community Health's Pursuit for Tenet
The lawsuit stems from November 2010, when CHS filed an unsolicited bid to acquire Tenet for $5 per share, later raising that bid to $6 and later $7.25. Tenet rejected the final offer of $7.25 in May 2010 and CHS' offer was formally withdrawn that month.
Last spring, Tenet filed suit against CHS, seeking damages for the cost of resisting a takeover bid from CHS. This was separate from the lawsuit Tenet filed against CHS in April 2011 that alleged systematic Medicare overbilling.
District Court Judge Barbara M.G. Lynn dismissed the suit seeking damages with prejudice, citing Tenet's "lack of standing" to bring the action.
In a Wall Street Journal report, a Tenet spokesperson said the court decision did not rule "on the substantive claims regarding Community Health's admission policies; rather this ruling was based on the technical issue of whether Tenet had standing, following Community Health's decision to drop its takeover attempt, to recover costs incurred during Community Health's proxy fight."
CHS President, Chairman and CEO Wayne T. Smith said the system is pleased to move forward. "We believe Tenet's board and management team initiated this litigation for the purpose of distracting shareholders from our bid to buy their company," he said in a CHS news release. "From the inception of this lawsuit, we have said there was no basis for Tenet to pursue its self-serving litigation."
Editor's note: This story was updated March 23. It initially reported that the lawsuit dismissed was that one pertaining to alleged Medicare overbilling. That lawsuit is unrelated to the suit dismissed last week.
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Timeline: Community Health's Pursuit for Tenet