Five physician shareholders at Radiology Imaging Consultants S.C. of the Chicago suburb Harvey, Ill., have filed suit against their practice alleging that they are being squeezed out of the business to increase the proceeds the remaining shareholders would earn if the practice was sold.
According to Crain’s Chicago Business, which broke the story, and the complaint filed July 30 in the Cook County Circuit Court, the trouble began when Manhattan Beach, Calif.,-based Radiology Partners Inc. expressed interest in buying the practice.
According to its website, Radiology Imaging Consultants is a traditional physician owned practice that does not offer teleradiology or management services. It operates as "an integrated group of locally rooted, hospital-based radiology practices" and serves 18 hospitals spread over Illinois, Kentucky, Indiana and Georgia. The practice also operates a vein clinic.
There are 73 physicians in the group, and of these, 43 have an ownership stake as a shareholder. The problem at the rood to the complaint is that all the shareholders have the same ownership interest of 200 shares of common stock. The shareholders filing the suit say that the senior shareholders are trying to increase their personal ownership stake ahead of a potential sale by eliminating some shareholders from the practice and redistributing their ownership stake among the remaining shareholders.
Four of the five radiologists who filed the suit allege that the senior shareholders targeted them for elimination because they either worked overnight shifts or had been with the practice for less than five years. The fifth radiologist was not targeted but joined the suit out of concern about the plan.
Christopher Griesmeyer of Chicago law firm Greiman Rome & Griesmeyer LLC, which represents the plaintiffs, told Crain’s Chicago Business that the situation could be defined as a "squeeze-out.”
While the potential sale and the elimination of certain groups of shareholders may have prompted the suit, it also seems to reveal some long simmering tension among the senior shareholders and the other physicians in the group.
The suit alleges that Abraham Bronner, MD, the CEO, and Perry Gilbert, MD, the president along with the board had created a “culture of condescension, contempt and secrecy.”
Steven Thompson, a Chicago-based partner at Ungaretti & Harris LLP, who is defending the doctors and board members told Crain’s that they will fight the suit “vigorously” and believe “the allegations in the complaint are baseless.”
The radiologists filing the suit are Joel Benveniste, MD; Elizabeth Holland, MD; Daniel Koscielski, MD; Myrosia Mitchell, MD; and Tejvir Nanda, MD.