Appellate Court Reduces Damages Award to Former Tenet Executive
The 2nd District Court of Appeals in Los Angeles on Tuesday reduced a damage award to a former executive of Santa Barbara-based Tenet Healthcare by nearly half, from $253 million to $148 million, company officials said Wednesday, Bloomberg/Los Angeles Times reports (Bloomberg/Los Angeles Times, 11/27). The appeals court in October ruled that Tenet must pay $253 million to former executive John Bedrosian for failure to honor a compensation contract in 1993. In the case, Bedrosian, a co-founder of Tenet predecessor National Medical Enterprises, filed a lawsuit over allegations that the company failed to provide him with stock benefits when he was terminated without cause in 1993 (California Healthline, 10/31). Tenet had petitioned for a re-hearing, but the court denied the request. Instead, the court modified the date from which prejudgement interest is calculated from April 1995 to Oct. 3, 2002; the original ruling calculated interest from the April date of the original trial court judgment, but the new ruling assumed that Bedrosian would have sold the shares on Oct. 3.
Tenet, which already had set aside money for the damage award, may see a boost in profit as a result of the ruling, according to Bloomberg/Times. Steven Campanini, a spokesperson for Tenet, said that the $148 million award "still wasn't justified" and that the company will appeal the ruling to the state Supreme Court, according to Bloomberg/Times. He added that Tenet will not change reserves or offer new earnings estimates during the appeal (Bloomberg News/Los Angeles Times, 11/27).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.