Corporate & Securities Law

Hospitals Abandon Merger During Pendency of FTC’s Motion for a Preliminary Injunction

By Matthew S. Wild

On June 6, 2008, Inova Health System announced that it is has abandoned its merger plans with Prince William Health Systems. The FTC had commenced an action in the United States District for the Eastern District of Virginia on May 12, 2008, in which it sought a preliminary injunction to block the merger during the pendency of its adminstrative proceeding. After the motion for a preliminary injunction had been submitted, the hospitals’ abandoned their merger plans. Abandoning merger plans after litigating through a preliminary injunction hearing is rare. The parties must have incurred millions of dollars in legal fees and a decision on the injunction was due in only a month. If the hospitals had prevailed in district court and merged, it is possible that the FTC would have dropped its administrative challenge. The administrative proceedings in this case also were unusual because the FTC appointed one of its Commissioners (Thomas Rosch) to act as the administrative judge.

Full post as published by Antitrust Commentary on June 09, 2008 (boomark / email).