This article by Nora Doyle-Burr was published by the Valley News on Feb. 27.
SPRINGFIELD — Springfield Medical Care Systems and Springfield Hospital, which are currently going through bankruptcy, are seeking a judge’s approval for a $275,000 settlement in a lawsuit with their former CEO.
In a lawsuit filed last August, former CEO Tim Ford alleged that leaders of the Springfield-based health system and a Tennessee-based consulting company forced him to resign in December 2018 in violation of Vermont’s Fair Employment Practice Act. Ford’s complaint also alleged intentional infliction of emotional distress, intentional and/or negligent disclosure, tortious interference, defamation, false light/invasion of privacy, negligent supervision, civil conspiracy and punitive damages.
In the settlement agreement, filed in federal bankruptcy court in Burlington on Wednesday, the defendants deny any liability in the case, but seek to “avoid the risk, uncertainty, and costs inherent in litigation.”
SMCS and the hospital entered chapter 11 bankruptcy last June, seeking to craft a plan to manage $20 million in debt. In addition to the 25-bed Springfield Hospital, the organization also operates outpatient clinics in the Vermont communities of Springfield, Chester, Ludlow, Bellows Falls and Londonderry, and in Charlestown, N.H.
The settlement agreement, which requires the approval of the court, would give Ford a one-time payment of $275,000, of which SMCS and the hospital would contribute $50,000; the remainder would be paid by Evanston Insurance Company and one or more of the other defendants in the case, according to court documents.
The settlement is significantly less than the $2.25 million from SMCS and $2.5 million from the hospital Ford had initially sought in August filings with the bankruptcy court. He alleged in his lawsuit that the health system owed him $230,894 as of Aug. 9, and said then that unpaid wages continued to accrue at a rate of $13,582 per two-week pay period. He also was seeking an unspecified amount in damages for benefits, humiliation and emotional distress.
The hospital and SMCS both “believe that litigation costs alone could exceed (the settlement amount), depending on the trajectory of the litigation,” according to the documents filed on Wednesday.
The health system’s spokeswoman Anna Smith, in a Thursday email, declined to comment on the case, saying the system does not comment on “matters of litigation.”
Ford’s attorney Stephen Ellis, of the Burlington-based firm Paul Frank + Collins, via email on Thursday also declined to comment before the court had approved the settlement.
Quorum Health Resources, the consultant Ford named in his suit, also declined to comment, spokeswoman Rosemary Plorin said via email.
The hospital system has contracted with Quorum to fill the positions of CEO and CFO of the hospital through a management contract.
The settlement also would protect Ford’s deferred compensation 457(b) plan from other claims by debtors in the bankruptcy case. Separately from this settlement, the health system has determined that keeping the organization’s 457(b) plan in place is in its best interest “in order to provide stability to their employees, which will help with retention and recruitment.”
The funds in the plan are paid by the employee, not the health system, and are not held in either SMCS or the hospital’s accounts.
Other than Ford’s claim to the retirement plan funds, the settlement agreement discharges all the claims between the parties.
SMCS and Springfield hospital are working to develop plans to exit bankruptcy, which they have indicated in court filings may require severing, to some degree, the tie between the hospital and the clinics.
The federal bankruptcy court has scheduled a case management conference for April 24 in Rutland, but it may be deferred if the organizations submit sufficient information to the court ahead of time, including when they expect to file their plans, according to a Feb. 21 court order.
