Hospital giant Community Health Systems is facing an $891 million class-action lawsuit after a District Court certified the case.
The federal securities class action suit was filed against the Franklin, Tennessee-based health system in the U.S. District Court for the Middle District of Tennessee in May, court filings show.
It sought class certification on behalf of purchasers of our common stock between Feb. 20, 2017, and Feb. 27, 2018, and alleges misleading statements resulted in artificially inflated prices for our common stock. The certification was granted late last month.
The case stems back to 2011 when the health system was attempting to acquire Dallas-based Tenet Healthcare, the Nashville Business Journal reported.
The case consolidated three class-action cases seeking class certification on behalf of purchasers of our common stock between July 27, 2006, and April 11, 2011. They alleged misleading statements resulted in artificially inflated prices for CHS' common stock.
Specifically, those claims in the securities fraud lawsuit came from Tenet officials who alleged multiple counts of fraud through failing to disclose “improper” admissions practices they said artificially inflated CHS' stock price, the Nashville post reported.
The company denies the claims.
"We believe this matter is without merit and will vigorously defend this case," CHS officials said in a recent Securities and Exchange Commission filing.