(CN) - Nebraska Medicine abruptly dropped its legal action against the University of Nebraska on Monday, which sought to stop the university's takeover of the nonprofit that operates two hospitals and 70 health care clinics in the state.
The announcement came in the form of a 3-page court filing, stating the lawsuit was being dismissed "without prejudice," meaning it could still be refiled.
A spokesperson for the medical group said, in a written statement: "Nebraska Medicine has asked the Douglas County District Court to dismiss the lawsuit filed last month involving the University of Nebraska Board of Regents and Clarkson Regional Health Services. Nebraska Medicine leadership and its Board of Directors are focused on moving forward under the single member governance structure approved by the University of Nebraska Board of Regents last month."
Earlier this month, the University of Nebraska announced that it and the hospital group's co-owner, the Clarkson Regional Health Services Board, were reconstituting Nebraska Medicine's board of directors. In a written statement, the university said it had "serious concerns about recent actions and behavior by" the old board, "including actions that have threatened critically important mission-driven strategic initiatives. These actions are currently under investigation by the state of Nebraska attorney general. In addition, in an extraordinary action, the Nebraska Medicine board has filed legal action against its two owners."
Replacing the board, the university added, "was necessary to protect the organization's reputation, stability, and future, and to ensure it can continue to fulfill its charitable mission effectively long into the future."
Nebraska Medicine has been owned by the University of Nebraska and Clarkson since 2016. On Jan. 2, the two groups announced the university was buying out Clarkson, with the school saying the $800 million acquisition would be a step toward creating the "world's best health care system in Nebraska."
The university says Nebraska Medicine and the University of Nebraska Medical Center have become increasingly integrated, sharing the same campus. And Nebraska Medicine already serves as the primary teaching hospital for the medical center's educational programs.
But shortly after the announcement was made, Nebraska Medicine sued in an attempt to halt the takeover.
"The University of Nebraska should not be allowed to violate its contractual obligations in order to control the operations of Nebraska Medicine nor should it be allowed unfettered access to Nebraska Medicine's funds, including funding from donors and organizational resources, especially when those funds could be utilized for non-health care purposes, such as making up for the university's well-publicized revenue shortfalls," the nonprofit wrote in its complaint filed in Douglas County District Court. It said its success as a hospital was due largely to its independence and autonomy.
The proposed takeover and subsequent board shakeup have caused a real stir in Nebraska. State Senator Brad von Gillern called the university's actions "incredibly short-sighted," referring to replacing the board as "the nuclear option," according to the Nebraska Examiner.
Another state senator, Tony Sorrentino, introduced a bill requiring legislative approval before Nebraska Medicine's sale could be finalized.
"I think we need some review, and we're not trying to do or undo the transaction," Sorrentino told the Nebraska Examiner.
Source: Courthouse News Service
