Hospital faces $100M suit over secret building project

Texas-based University General Hospital is facing a $100 million lawsuit for allegedly defrauding business partners in a hospital building project.

ACHDC LLC and Palicio Gate filed the lawsuit against University General Hospital, UGHS Alvin (Texas) Hospital and Houston's Skymark Development Company, accusing the physician-owned acute care hospital of fraud, civil conspiracy, breach of contract, tortious interference with prospective business relations and tortious interference with existing contract, Houston Business Journal reported.

University General last year agreed to build a hospital in Alvin with the plaintiffs, a deal that helped the hospital raise millions of dollars during the public offering, according to the lawsuit. However, the suit claims the hospital had secret talks with a rival Alvin landowner, Skymark Development Company.

"We allege University General unlawfully took our clients' proprietary strategies, contacts, market research and hospital forecasts and negotiated a secret deal with Skymark for a hospital literally across the street from our clients' project in Alvin," attorney Tony Buzbee, who is representing the plaintiffs, said in a Friday statement.

However, University General President Donald Sapaugh said the agreement was non-binding and that it honored its letter of intent in good faith, according to Houston Business Journal.

The court ordered a temporary restraining order against the defendants Thursday, according to the Buzbee Law Firm statement.

For more information:
- read the Houston Business Journal article
- see the statement

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