Lawsuit Filed by Virtua Health Against Trinity Health for $12 Million Involving Lourdes Health Acquisition

Virtua Health has filed a lawsuit against Trinity Health in New Jersey federal court seeking reimbursement for more than $12 million in legal fees and costs associated with a 2019 transaction involving the two non-profit health systems. The legal dispute arose from Virtua’s acquisition of the two-hospital Lourdes Health System from Trinity in 2019. However, another South Jersey hospital, Deborah Heart & Lung Center in Browns Mills, sued Trinity to block the deal, alleging that the sale to Virtua would violate a contract between Deborah and Lourdes concerning cardiology services in Burlington County. Virtua had anticipated that Deborah might become a defendant in the case, which is why they made completion of the deal contingent on Trinity agreeing to indemnify Virtua for any losses related to the lawsuit, resulting in an indemnity clause being added to the sales agreement.

The Deborah litigation was resolved in September, although the terms of the settlement were not disclosed. Despite this resolution, Trinity has refused to pay the $12 million in legal fees and expenses for which Virtua is seeking reimbursement. Virtua’s complaint states that this amount is a small fraction of Trinity’s litigation budget, considering the health care giant’s revenue of $21.6 billion in fiscal 2023 and its operation of 101 hospitals in 27 states. Neither Virtua nor Trinity has provided further comment on the ongoing legal dispute.

Notably, this is not the first time a South Jersey health system has taken legal action against Trinity regarding the sale of Lourdes. In 2017, Cooper University Health Care backed out of a tentative deal to acquire Lourdes and a hospital in Trenton from Trinity after discovering potential liabilities of up to $100 million during due diligence. Following the cancellation of the deal, Cooper attempted to recover $15 million placed in escrow as a deposit, but a federal jury ruled in 2022 in favor of Trinity, awarding them the escrowed funds.