Virtua Sues Trinity Health for Millions in Legal Fees and Costs Over Lourdes Acquisition Dispute

In New Jersey federal court, Virtua Health has filed a lawsuit against Trinity Health 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. As a result, an indemnity clause was added to the sales agreement. Despite resolving the Deborah litigation in September 2023 and settling out of court without disclosing any terms, Trinity has refused to pay Virtua for their legal fees and expenses.

In their complaint, Virtua argues that this amount is only a small fraction of Trinity’s litigation budget given its 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 that South Jersey health systems have 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 was ruled against by a federal jury who awarded escrowed funds back to Trinity in favor of them.

As such, it appears that there is no end in sight for this ongoing legal battle between two major players within New Jersey healthcare industry.