Healthcare benefits provider Universal American Corp claims GTCR misled it about the finances and business prospects of APS, which it bought in March 2012, according to a report by Reuters.
The lawsuit came just 16 hours after Partners Healthcare Solutions, the GTCR company which sold APS, filed its own suit seeking a declaration that UAC’s claims were baseless and the release of money held in escrow following the close of the merger.
Universal’s claim says the “ugly truth” about the business emerged soon after the purchase, with the company being declared in default by its biggest customer and losing some or all of its business with other large clients, Reuters added.
It cited Universal’s suit as saying, “Defendants engaged in a deliberate campaign to conceal the truth about APS.
“The avalanche of bad news … the complete evaporation of APS’s income within months, and the sheer number of misrepresentations and omissions in the merger agreement … are all telltale signs of fraud.”
Partners Healthcare’s own filing admits that APS’ earnings in 2012 “fell well short of what both parties had hoped” but called the dispute “a straightforward case of buyer’s remorse” which sought “to turn the seller into its scapegoat”, Reuters said.
The cases are Universal American Corp v Partners Healthcare Solutions Holdings LP et al, US District Court, District of Delaware, No. 13-01741, and Partners Healthcare Solutions Holdings LP v Universal American Corp, Delaware Chancery Court, No. 9022.
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