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Lutheran Health suit with ex-CEO gets settled

November 18, 2018

Slightly more than one year after it began, the courtroom saga that starred Lutheran Health Network, its parent company and former CEO Brian Bauer has ended.

In a joint, three-paragraph statement issued shortly before 6 p.m. Saturday, the parties stated:

“Lutheran Health Network and CHSPSC LLC (Community Health Systems) have settled their lawsuit against Lutheran Health Network’s former CEO, Brian Bauer, which alleged that Bauer violated the restrictive covenants of his stock option agreement.”

“Under the terms of the agreement, Bauer is prohibited from disclosing any confidential, proprietary or non-public information obtained during his employment with Lutheran and from soliciting for employment any Lutheran employees until June 13, 2020. The stock option agreement and the injunction entered by the Williamson County Tennessee Court enforcing that agreement remain in effect. The parties have agreed to keep other terms of the settlement confidential.”

“Along with its physicians and employees, Lutheran Health Network leadership remains focused on providing comprehensive, high-quality health care services for residents across northeast Indiana and continuing the network’s long history of civic and community engagement.”

Bauer issued an additional, brief statement. He said: “I’m pleased we were able to settle and end this dispute, and I look forward to the future in northeast Indiana.”

The lawsuit alleged Bauer defamed and disparaged Lutheran network’s Franklin, Tennessee-based parent company to undermine the company’s business relationships. He was accused of trying to drive away patients and physicians and drive down Lutheran Health Network’s value.

Lutheran’s network also filed suit asking the court to keep Bauer from working for competing health care providers in northeast Indiana.

A Tennessee court ruled in February that Bauer can continue working for Indiana University Health, but he can’t work on health care-related ventures with anyone with whom he has shared confidential Lutheran Health Network business strategy.

Both Tennessee and Indiana courts were involved in the dispute that got testy at times.

Judge Nancy Boyer of Allen County Superior Court was asked in June to decide which topics Lutheran Health Network’s attorneys could cover when taking depositions in the case.

Attorneys for Kyle Witwer and Witwer Construction Inc. asked Boyer to throw out a subpoena directing Witwer to testify and provide “reams of documents” about his business dealings with Bauer.

Witwer Construction built the West Jefferson Boulevard building occupied by Umi Fort Wayne, an upscale sushi restaurant owned by a local partnership that includes Bauer. Umi leases the space from Witwer.

Mark GiaQuinta, who represented Witwer, argued in June that Witwer never received confidential information about Lutheran’s network from Bauer and had no information relevant to Lutheran’s lawsuit against Bauer.

In February, a Tennessee court dismissed three of six counts in the lawsuit against Bauer. Both sides declared that ruling a victory.

Counts of trade and commercial disparagement, unfair and deceptive business practices, and breach of duty of loyalty were all dismissed.

The lawsuit alleged both Bauer and a Facebook poster using alias “Sajin Young” defamed and disparaged CHS to undermine the company’s business relationships.

CHS had asked for unspecified damages and for Bauer and “Sajin Young” to be ordered to stop publicly criticizing CHS. The Sajin Young account has been removed from Facebook.

sslater@jg.net

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