Columbia/HCA 5: Court Reinstates Shareholder Suit
February 14, 2001
The Wall Street Journal
NASHVILLE, Tenn. (AP) — A Nashville judge erred in dismissing lawsuits filed on behalf of multibillion-dollar pension funds and other Columbia / HCA Healthcare Corp. shareholders against current and former executives of the nation’s largest hospital chain, a federal appeals court said.
A three-judge panel of the 6th U.S.Circuit Court of Appeals in Cincinnati sent the cases back to U.S. District Judge Thomas Higgins to consider the merits of the shareholders’ arguments that mismanagement by the company’s directors and officers devalued the Nashville company, now known as HCA-The Healthcare Co.
The ruling “is a tremendous victory” for the nearly one million members of the New York state pension fund and other shareholders, said New York Comptroller H. Carl McCall, who filed the first of the shareholders’ suits against 13 current or former directors or senior officers. The company’s reputation soured in 1997 after federal agents raided Columbia / HCA offices and hospitals amid a fraud investigation.
A spokesman for the company said HCA attorneys hadn’t decided whether to appeal to the U.S. Supreme Court.