Amedisys Faces Lawsuit Over Lender Control of Board

Amedisys Inc. (NASDAQ: AMED) has been accused of entering into illegal credit agreements with lenders, granting them influence in changes within Amedisys’ administration, according to a class action lawsuit filed against the major home health and hospice provider.

The lawsuit claims Amedisys’ board established an illegal agreement in 2012 with JP Morgan Chase Bank and another in 2014 with Cortland Capital Market Services LLC. The agreements allow the lenders to require immediate payment of Amedisys’ debt upon a change in the majority of board members or the acquisition of 35% of Amedisys’ stock, according to the lawsuit.

Further, the lawsuit says the agreements prevent potential activist investors from attempting to win a majority of seats on the Amedisys board, The Advocate reports. They also effectively inhibit any takeover as the lenders can approve or deny changes to the board, according to the lawsuit. 

Amedisys officials declined to comment on the pending litigation when contacted by Home Health Care News.

Two Amedisys shareholders, Michael Bohnett, of California, and Jeremy Lawson, of Tennessee, filed the lawsuit in Baton Rouge, Louisiana. The suit solely names North Tide as an activist investor, Amedisys’ second-largest shareholder with more than 4 million shares, or 12 percent, of the provider’s stock.

The lawsuit describes a letter from North Tide urging a merger with Almost Family Inc. and the installation of Almost Family’s CEO and president as head of Amedisys. The company instead appointed Paul Kusserow as CEO, a move that might force North Tide “to run a proxy contest at the company,” according to the suit.

Written by Kourtney Liepelt