A judgment is expected soon in a nasty legal fight between National Medical Enterprises and one of its founders, John Bedrosian.
The lawsuit, which asks for $170 million in damages, was filed in Los Angeles Superior Court against the Santa Monica, Calif.-based hospital chain after Mr. Bedrosian was fired as senior executive vice president one year ago.
A Superior Court official called a "referee" conducted a hearing on the suit in July, and a ruling is expected shortly. That decision could be appealed through the court system.
NME executives deny Mr. Bedrosian's charges and have countersued him, contending he owes the company millions in unpaid loans.
The lawsuit paints a dire picture of Mr. Bedrosian locked in a power struggle with Chairman and Chief Executive Officer Jeffrey Barbakow, who was trying to turn around the troubled company in the fall of 1993. Mr. Bedrosian describes Mr. Barbakow's manner in forcing him out as "extreme and outrageous," and contends the ordeal has caused him "great mental, physical and nervous pain and suffering."
In April 1993, NME's board forced Richard Eamer to resign as CEO and Leon-ard Cohen to step down as chief operating officer. On June 1, 1993, the board forced Mr. Eamer to leave as chairman and Mr. Cohen to quit as president. Mr. Barbakow, an NME director since 1990 and former investment banking executive, was named chairman and CEO. His job was to resolve the extensive litigation and federal investigations involving the company's psychiatric hospitals, while realigning NME's operations.
According to the lawsuit, when Mr. Barbakow took over, pressure began to build to force out Mr. Bedrosian. Eventually, Mr. Barbakow called, saying he wanted Mr. Bedrosian to leave because he was part of the "old guard," according to the suit. Still, Mr. Bedrosian refused.
On Sept. 20, 1993, a one-page, hand-delivered letter from Mr. Barbakow told Mr. Bedrosian that the board's executive committee had voted to terminate him.
In late 1992, Mr. Bedrosian borrowed $1.3 million to pay bank loans that he had taken out to pay income taxes. Mr. Bedrosian said he had intended to sell NME stock to repay the loans, but company policy would not allow him to do so.
NME is claiming that Mr. Bedrosian is in default on a total of $2 million in loans.
In the lawsuit, Mr. Bedrosian contends that Mr. Eamer promised him a job at NME until he turned 65 and a secure retirement-including $339,559 a year, his own car, health insurance for him and his wife, and lifetime personal use of NME's corporate airplanes. Instead, he was terminated at age 58.