Parent of Lutheran Health Network sues former CEO Brian Bauer, five others
The fired former CEO of Lutheran Health Network is being sued by the local medical group’s parent company.
A lawsuit filed in Williamson County, Tenn., by Nashville-based Community Health Systems and Lutheran Health Network accuses Brian Bauer and five unnamed defendants of a “continued pattern of disparagement and defamation, unfair and deceptive practices, and for … interfering with existing and prospective business relationships of (Lutheran). The defendants engage(d) in this unlawful conduct to make good on ongoing threats to harm plaintiffs and their business because of (CHS’) prior refusal to acquiesce in the defendants’ demands to sell to them and others the Lutheran Health Network for less than fair market value.”
As The News-Sentinel first reported, a group led by local physicians in May offered CHS $2.4 billion for Lutheran Health, but the offer was rejected as being at least $1 billion to low. CHS subsequently fired Bauer and other top officials, after which Bauer reportedly helped put together an agreement with IU Health, which last month announced its intent to open a primary care office and other facilities in Fort Wayne. IU Health says it has “contracted with Brian Bauer to help us develop our physician practice in Fort Wayne.”
At the time the buyout proposal was offered, some Lutheran doctors and other observers publicly suggested Lutheran Health Network’s market value might drop if the offer was rejected. Many also accused CHS of failing to invest in its Fort Wayne facilities, lowering the quality of care in order to subsidize money-losing facilities elsewhere. The lawsuit alleged that, misrepresentations about “patient care, capital investment and the financial status (of CHS), defendants have disrupted” normal business and sowed “the seeds of unfounded fear with hospital staffs and, no doubt patients.”
Even as he was trying to drive down CHS’ value, the lawsuit alleges, Bauer was profiting by exercising his option to buy 3,000 shares of CHS stock at a profit of about $74,500.
According to a copy of the lawsuit obtained by News-Sentinel.com, Bauer and the others “are executing a long-range scheme to harm plaintiffs’ business and to drive them from the Fort Wayne market for the purpose of advancing the defendants’ own private economic interests.”
The unnamed defendants are anonymous online commentators who collectively use the pseudonym “Sajin Young.”
The lawsuit states that, “in order to obtain his position with IU Health, Bauer has marketed himself as a Fort Wayne insider with information about the health-care industry …, information he obtained from the plaintiffs while employed as LHN CEO.” Some of this information allegedly was shared with a local physician-directed website devoted to the ongoing Lutheran story.
CHS asks the court to order Bauer and the other defendants to cease their alleged activities, along with unspecified financial damages and costs.
Bauer declined to comment but denied any wrongdoing.