Judge Orders Specific Performance in the Sale of Two Hospitals

According to this report from the Daily Local News website, a judge ordered Tower Health to sell two hospitals in West Chester Pennsylvania (whose courthouse is pictured at left) to Canyon Atlantic Partners, ordering the seller to complete a deal from which it had tried to pull out.  According to the report, the court’s order (which I have not seen) sides with Canyon Atlantic, but also cites the public interest in ordering specific performance of the sale.

One might think that the harm to Canyon Atlantic, a Texas-based firm, from Tower Health’s breach could be remedied with damages.  However, the court notes,

The hospitals provide significant health resources for Chester County and its citizens. The hospitals are critically important to their local communities. The impact of the hospital closures spreads beyond the local community. Neighboring hospitals will be overburdened rendering health resources scarcer to a greater community.

Tower Health just bought the two hospitals, along with a third, in 2017 for $423 million.  It announced last Fall that it was going to close the two hospitals, at which point Canyon Atlantic offered to buy them for $16.5 million. Tower Health was not especially forthcoming about its reasons for trying to terminate the deal.  Some more generous offers may have come along.  Nobody seems very impressed by Tower Health’s conduct.  It underestimated the sticky grasp of contractual obligations.

H/T David Hoffman, aka @HoffProf