Southern Healthcare Sys. Inc. v. Health Care Capital Consol. Inc.

Defendant potentially invoked the protections of Georgia law by communicating with plaintiffs' predecessor-in-interest in Georgia, retaining a Georgia attorney to represent its interests in negotiating a subordinated promissory note and agreeing that Georgia law would govern any disputes.

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Southern Healthcare Systems, Inc. “SHS”, a non-profit Louisiana corporation, owns several long-term health care facilities in Tennessee, Texas, and Kentucky. In 1990, it entered into agreements with Health Care Capital, Inc. “HCC”, a Georgia corporation, to manage the facilities. In connection therewith, SHS gave HCC a promissory note in the amount of $3,000,000. Because SHS was already indebted to other lenders at that time, the note was subordinated to the other loan agreements.

A provision of the subordinated note reads: “The holder of this note shall have the right to approve its successor manager, as well as any subsequent manager to be appointed during the term of this note.” This provision became the focus of controversy when SHS terminated the management agreements and began to manage the facilities itself. At that point, HCC’s successors, Health Care Capital Consolidated, Inc. and others hereinafter referred to as “HCCC” or “plaintiffs” brought suit in the Superior Court of DeKalb County to enjoin SHS from operating the facilities itself, and to require SHS to obtain HCCC’s approval as to the manager of the facilities. SHS answered the complaint and plaintiffs moved for summary judgment. Following a hearing, the superior court entered an order granting plaintiffs the relief they sought. SHS appealed.

Southern Healthcare Sys. Inc. v. Health Care Capital Consol. Inc.

Defendant potentially invoked the protections of Georgia law by communicating with plaintiffs' predecessor-in-interest in Georgia, retaining a Georgia attorney to represent its interests in negotiating a subordinated promissory note and agreeing that Georgia law would govern any disputes.

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