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Community Health Moves to Dismiss Tenet Lawsuit

Community Health Systems moved on Tuesday to dismiss a lawsuit filed against it by Tenet Healthcare, in which Tenet accused Community Health of overbilling Medicare.

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In its lawsuit, Tenet claims that the takeover offer misleads its investors, arguing that projected cost savings are built on fraudulent numbers. Tenet has asked a federal court in Texas to require Community Health to restate its public financial statements about the merger and lower its estimates for potential cost savings.

Community Health, which is pursuing a $3.3 billion hostile takeover offer of Tenet, said in a statement that the recent conversion of its $6-a-share offer to all cash, from cash and stock, obviates the legal basis for the lawsuit.

Community Health also reiterated its argument that Tenet’s lawsuit had no factual basis. The company said it planned to rebut the heart of the lawsuit during its earnings call with analysts on April 28.

Rick Black, a spokesman for Tenet, said in a statement: “This changes nothing. We intend to vigorously prosecute our claims.”

Community Health’s Response to Tenet Lawsuit

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