The buyers of Boca Raton (Fla.) Community Hospital say they will forge ahead with their plans to acquire the not-for-profit facility, despite a second lawsuit that threatens to derail the deal.
The second suit was brought by a Boca Raton group known as Save Our Hospital, which includes founders of the facility. It sued 334-bed Boca Raton Community and its individual trustees, accusing them of scheming to control "between $300 million and $500 million" in proceeds from the proposed sale of the hospital to a group of not-for-profit systems.
The hospital's board last week said it will delay action until after Jan. 1 on a letter of intent to sell the facility to the systems but added that it has "preliminary issues" to resolve. The board is considering a deal under which Allegany Health System, Tampa, Fla.; Intracoastal Health Systems, West Palm Beach, Fla.; and Eastern Mercy Health System, Radnor, Pa., would purchase the facility for
$190 million and assume an undisclosed amount of its debt.
"We are completely committed to working with the board and doing what it takes to keep the hospital's not-for-profit status," said Pat Bowers, a spokeswoman for the prospective buyers.
It's the second suit against the hospital in the past two weeks. Florida Attorney General Bob Butterworth sued the hospital earlier this month, demanding the proposed sale be consistent with the wishes of the facility's donors (Dec. 9, p. 4).
The attorney general's suit was viewed as having national implications because it could lead to closer examinations of sales of not-for-profit hospitals. Lately, attorneys general across the country have been closely scrutinizing deals involving for-profit facilities.
The latest civil suit filed against Boca Raton Community trustees adds another twist to the implications of the proposed sale.
The suit, filed in Palm Beach (Fla.) Circuit Court, is led by John Weir and Gloria Drummond, who have given "substantial" donations to the facility in the past three decades. Drummond, a hospital founder, donated an undisclosed amount of money in 1962 to create a foundation in the memory of her two children. Weir also is a founder and served on the board for 26 years.
Save Our Hospital is demanding the 10 trustees be removed and the proposed sale be blocked. The group also wants unspecified damages from each trustee and the hospital. It says the hospital should remain under local control to preserve the intentions of donors and the community.
"It's the first time I've seen a private party sue, rather than a government office (like) an attorney general's office suing hospital board members," said Edward Hopkins, an attorney with West Palm Beach, Fla.-based Steel Hector and Davis.
Both suits also seek to determine the hospital's value, which has yet to be fully disclosed. The hospital had net income of $6.7 million on net revenues of $139.4 million last year, according to HCIA, a Baltimore-based healthcare information company. Its assets were $124.3 million.
Its board said the hospital must link with a larger system to provide economies of scale and avoid losses from managed care.