Tower Loses Lawsuit Over Pottstown Hospital Sale

POTTSTOWN PA – Tower Health has lost a lawsuit filed against the company from which it bought Pottstown Hospital during 2017, according to a federal court ruling released Tuesday (Sept. 6, 2022).

Tower alleged Community Health Systems breached a 2017 asset sale agreement involving the hospital because it was in a non-compliant condition at the time. The United States District Court for the Eastern District of Pennsylvania did not agree; it ruled the hospital was sold in an “as is” condition, and at “all material and relevant times” complied with state license requirements and federal Medicare and Medicaid regulations.

As a result, the court said, Tennessee-based Community Health “did not breach” the agreement and ruled in its favor. The court also said Community Health was entitled to “reasonable attorneys’ fees and costs in the case,” the publication Becker’s Hospital Review reported Thursday (Sept. 8). The amount to be repaid by Tower is not known.

The sale of Pottstown Hospital had been bundled with the sales of four other hospitals: Phoenixville Hospital, Brandywine Hospital, Chestnut Hill Hospital, and Jennersville Hospital. Tower’s lawsuit was filed in 2019, and was the subject of a 19-day bench trial over May and June 2021. Judge Edward G. Smith presided.

Tower has since closed Brandywine, and is offering it for sale; agreed to a future joint ownership agreement for Chestnut Hill; and earlier closed Jennersville, then sold it to ChristianaCare in Wilmington DE. Phoenixville and Pottstown hospitals remain under Tower’s ownership, although both reportedly lost millions of dollars during the health care system’s recently ended 2022 fiscal year.

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