Vasilios J. Kalogredis, left, and Katherine E. Ladow, right, of Lamb McErlane.
On Dec. 19, 2017, a group of New York physicians filed a verified complaint in the U.S. Supreme Court of the state of New York County of Westchester, challenging their partnership’s merger with a large hospital practice. The physicians challenging the merger claim that the deal will reduce them to “indentured servants.”
Middletown, New York-based Crystal Run Healthcare LLP (Crystal Run Healthcare) entered into a merger agreement with Bronx, New York-based entity, Montefiore Medical Center to create a new entity named Crystal Run Healthcare Physicians LLP. The merger agreement states that the transaction would become effective as of Jan. 1, 2018 and all physician partners of Crystal Run Healthcare are required to sign new employment agreements with the newly created entity. Crystal Run Healthcare is a limited partnership entity consisting of 133 physician partners. Nine of the 133 physician partners dissented and disagreed with the Montefiore Medical Center merger. The nine dissenting doctors claim in their verified complaint that the merger is not in their best interests because the physicians were required to sign new employment agreements with Montefiore Medical Center which demoted them from partners to employees. The nine dissenting doctors further assert that the Montefiore Medical Center employment agreement contains highly unfavorable terms and “draconian noncompete clauses.” The dissenting doctors claim that the new employment agreement forces them to become “indentured servants” to Montefiore Medical Center.
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