The simmering ownership dispute over South Seminole Hospital in Longwood, Fla., is headed to trial after a federal judge last month denied competing motions that would have declared one side or the other an instant winner.
The U.S. District Court in Orlando, Fla., has put the case on its February docket. The trial could begin as soon as this week, according to one attorney.
The warring parties are not-for-profit Orlando Regional Healthcare System and Columbia/HCA Healthcare Corp., a Nashville, Tenn.-based for-profit chain. The competing systems co-own South Seminole through a 1992 joint venture between Orlando Regional and Healthtrust, a for-profit chain acquired by Columbia in April 1995.
Each side has offered to buy out the other's 50% stake in the 206-bed facility, but they haven't been able to work out a deal despite months of negotiations. At one point, Columbia offered to sell its share to Orlando Regional for $24 million, the value of Healthtrust's original stake in the joint venture, but Orlando Regional only wanted to pay $12 million, according to court records.
The inability to strike an agreement resulted in Orlando Regional filing a federal antitrust and breach-of-contract lawsuit against Columbia and Healthtrust in February 1995.
According to Orlando Regional, the original contract between it and Healthtrust gives it the right of first refusal in acquiring Healthtrust's stake in the South Seminole joint venture. And, given Columbia's other hospitals in the same market, Columbia's ownership of South Seminole would violate federal antitrust laws, it contended.
Columbia executives have said the claims are without merit and have described the lawsuit as a bullying tactic to force a sale to Orlando Regional.
Last April, U.S. District Judge G. Kendall Sharp temporarily barred the co-ownership of South Seminole to transfer to Columbia from Healthtrust until the case was decided, ruling that such a transfer could cause irreparable harm to Orlando Regional.
Shortly thereafter, the Federal Trade Commission cleared the Columbia-Healthtrust deal with conditions, including a requirement that the South Seminole joint venture be terminated with one side buying out the other. A second round of negotiations failed last fall.
Sharp cleared the path for trial on Jan. 25, when he denied Columbia's motion for summary judgment, or decision without a trial, on Orlando Regional's antitrust claim. He also denied competing motions for summary judgment on the breach-of-contract claims by both Columbia and Orlando Regional.
Orlando Regional's antitrust attorney, John Cusack of Gardner, Carton & Douglas in Chicago, said he viewed Sharp's rejection of Columbia's attempt to have the antitrust claim thrown out as a major legal victory.