A North Carolina business court has sided with Fayetteville, N.C.-based Cumberland County Hospital System in an ownership dispute with physician Michael Woodcock, MD, over Fayetteville ASC.
On April 1, 2019, one of the ASC's limited partners divested itself and purchased 100% of the equity of the general partner, known as Cape Fear Valley Ambulatory Surgery Center. Dr. Woodcock alleged that that transaction violated the ASC's limited partnership agreement.
When the ASC's partnership agreement was last amended in 1995, its ownership consisted of one general partner and 12 limited partners.
Dr. Woodcock is one of the physician partners with an ownership stake in the ASC, according to court documents filed in October.
In 2018, the general partner decided to sell its equity in the ASC, and CCHS and Dr. Woodcock both engaged in negotiations to purchase the equity.
Prior to April 1, 2019, the hospital owned about 22% of the facility and Dr. Woodcock owned about 4.6%.
The hospital system won purchasing rights, and following the transaction, owned 43.66% of the limited partnership and 100% of the equity of the general partnership.
Dr. Woodcock challenged the validity of the transaction, stating that the hospital "does not have lawful authority to own 100% of the equity of [CFVASC] or to exercise any authority over [CFVASC]."
The lawsuit was voluntarily dismissed and refiled in 2021 by Dr. Woodcock and three other physician partners with ownership interest.
The court has decided in favor of the hospital system, stating that the hospital and the ASC did not violate the existing limited partnership agreement.