Five physicians who are shareholders in Radiology Imaging Consultants S.C. in Harvey, Ill., are suing their practice, claiming that they are being forced out of the business in order to increase the share value for the remaining practice shareholders when the practice is sold.
The complaint was filed July 30 in Cook County Circuit Court, Crain's Chicago Business reported. The prospective buyer is Manhattan Beach, Calif.-based Radiology Partners, Inc., which is looking to purchase practices after receiving $55 million in funding from private equity firm New Enterprise Associates, Inc.
According to the complaint, the five physicians allege that practice CEO Abraham Bronner and Perry Gilbert, the president, are trying to eliminate certain shareholders.
"That's a squeeze-out," attorney Christopher Griesmeyer, who represents the plaintiffs, told Crain's.
There are indications that the suit represents many years of tension within the practice. According to the practice, Bronner, Perry and the practice board have "created a culture of condescension, contempt and secrecy."
Steven Thompson, a partner with Ungaretti & Harris LLP, which represents Bronner and Gilbert, called the allegations "baseless."
Consolidation continues to be a dominant trend in the hospital and healthcare industry, including in radiology.
"[G]roups are gobbling up other groups," Patrick Moore, president of Smart Physician Recruiting, told Diagnostic Imaging earlier this year. "Or, even in some cases, hospital systems are saying to radiology groups, 'We're done negotiating. Either you'll be our employees or we'll find someone else.'"
To learn more:
- read the Crain's article