Marin General Hospital in Greenbrae, Calif., is suing to recover $120 million that the public hospital says was bled from its books in the final years of a management contract with Sutter Health.
Marin General seeks $120 million from Sutter
Under a 2006 deal settling previous litigation, control of the hospital was returned to the Marin Healthcare District in June 2010, five years before a 30-year contract with Sutter was originally set to expire. Marin General alleges that after the agreement, Sutter set about undermining its soon-to-be competitor by appropriating between $20 million and $37 million a year, compared with much smaller cash transfers in previous years.
A spokeswoman for Sutter said the system would not comment specifically on the lawsuit. “It is indeed regrettable that the district has elected to pursue legal action as there's no basis whatsoever for such action,” spokeswoman Kathryn Graham said, adding that the system would defend itself vigorously and that its actions during the separation have been approved by state regulators. The Sacramento-based system owns 22 hospitals in California and one in Hawaii.
“Sutter asked Marin General for a divorce and then decided they'd just clean out the bank account before the divorce became final,” the hospital's attorney, James Brosnahan , a senior partner in the law firm Morrison Foerster, said in a news release announcing a lawsuit, which was filed in Marin County Superior Court.
The lawsuit contends the hospital's board approved the cash transfers because the body was packed with Sutter employees.
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