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CAMDEN, New Jersey (October 2022) - Trinity Health Corporation recently prevailed in a lawsuit brought by The Cooper Health System over a $15 million breakup fee related to Cooper’s withdrawal from a 2017 agreement to purchase two New Jersey hospitals from Trinity. After a two-week trial, a jury in federal court in Camden, New Jersey agreed with Trinity that Cooper failed to comply with the terms of a letter of intent when it withdrew from the transaction. As a result, Trinity is entitled to the $15 million. Trinity was represented by Gerald Burns, Mark Kasten, AshLeigh Sebia and Reeny Kelly of the Philadelphia office of Buchanan Ingersoll & Rooney.

The case arose from the failed sale of Our Lady of Lourdes Medical Center in Camden and St. Francis Medical Center in Trenton. In 2017, Cooper entered into a letter of intent to purchase Lourdes and St. Francis for $150 million from a Trinity subsidiary, Maxis Health. The letter of intent allowed Cooper to perform additional due diligence for 90 days, after which Cooper could decide whether to finalize the sale. Trinity was concerned about the risks of Cooper pulling out, and the parties agreed that Cooper would deposit $15 million in escrow to serve as a breakup fee. If Cooper withdrew from the deal, the fee was to be paid to Trinity, unless the reason that Cooper withdrew was among a list of due diligence issues that were identified in the letter of intent. Moreover, before Cooper could withdraw, the letter of intent required Cooper to provide notice to Trinity and an opportunity to mitigate any due diligence issue.

In December 2017, Cooper withdrew from the deal, citing several alleged due diligence issues, and filed suit to recover the breakup fee. At trial, Trinity contended that Cooper’s real reasons for withdrawing had to do with the changed finances of the deal, not the due diligence issues. In addition, Trinity argued that Cooper had never given Trinity notice and an opportunity to mitigate the issues that it claimed. On September 30, 2022, the jury returned its unanimous verdict, agreeing with Trinity that Cooper failed to provide the notice required under the letter of intent. As a result, the jury did not need to reach the question of Cooper’s true reasons for withdrawing from the sale.

The jury also found for Trinity on its claim that Cooper breached the parties’ confidentiality agreement by including confidential information in its complaint that was publicly filed, and then refusing to withdraw the filing.