Virtua Health sued Trinity Health over $12 million in legal fees related to Lourdes acquisition lawsuit

Virtua Health sued Trinity Health in New Jersey federal court Wednesday, seeking reimbursement for more than $12 million in legal fees and other costs related to a 2019 transaction between the two nonprofit health systems.

The dispute originated with Virtua’s 2019 acquisition of the two-hospital Lourdes Health System from Trinity. Another South Jersey hospital, Deborah Heart & Lung Center in Browns Mills, sued Trinity to block the deal.

Deborah alleged that the sale to Virtua would breach a contract Deborah had with Lourdes regarding cardiology services in Burlington County.

Virtua anticipated that Deborah would add Virtua as a defendant. That’s why Virtua refused to complete the deal unless Trinity agreed to indemnify Virtua for losses related to Deborah’s lawsuit, according to Virtua’s new complaint. Trinity accepted an indemnity clause that was added to the sales agreement, a court document shows.

The Deborah litigation was settled in September. Terms were not disclosed.

Now Trinity refuses to pay the $12 million, “which amounts to a small fraction of Trinity’s litigation war chest,” Virtua’s complaint said. Trinity had $21.6 billion in revenue in fiscal 2023. The Catholic health-care giant, headquartered in Livonia, Mich., operates 101 hospitals in 27 states, according to its website.

Trinity and Virtua said they do not comment on pending litigation.

This is the second time a South Jersey health system has sued Trinity over the sale of Lourdes.

Cooper University Health Care abandoned a tentative deal in 2017 to acquire Lourdes and a hospital in Trenton from Trinity after due diligence uncovered the potential for as much as $100 million in liabilities. After backing out of the deal, Cooper tried to recoup $15 million it had put in escrow, as a sort of down payment.

A federal jury decided in 2022 that the money should go to Trinity.