Two senior Quincy Medical Center executives who were ousted days after the Steward Health Care acquired the facility are seeking a total of $603,000 in severance pay that they claim is a part of their contract.
According to a filing in U.S. Bankruptcy Court, Dr. Apurv Gupta, the former senior vice president for Clinical Affairs/Chief Medical Officer of Quincy Medical Center, and Victor Munger, Senior Vice President of Human Resources, assert they were in good standing with the hospital when the medical center filed for Chapter 11 bankruptcy on July 1 of last year.
However, according to the filing, Gupta and Munger were both terminated without cause effective Oct. 1, when all the assets of Quincy Medical Center and its affiliates were acquired by Steward Family Hospital, Inc.
Furthermore, both Gupta and Munger assert in the filing that Steward agreed to keep employees on through the bankruptcy process.
Also, under the terms of their contract, both executives were entitled to a minimum of six and a maximum of 12 months base salary upon termination other than for cause, the filing states.
Munger is claiming $135,000 – consisting of severance pay of $90,000, or six months salary, and $45,000, representing the minimum three months salary he would have received had Steward hired him, from the center.
Likewise, Gupta is claiming $468,000 from Quincy Medical Center, which includes $312,000 or 12 months salary, and $156,000, or 180 days salary – because the hospital failed to give Gutpa the requisite 180 days notice – a requirement of his contract.
Christopher Murphy, the Director of Media Relations for Steward Health, had no comment on the two executives' departures or on their assertions in the lawsuit, saying that, "We don’t comment on personnel matters."
According to a response filed from Bankruptcy Judge Melvin S. Hoffman, Steward should be responsible for both claims as mandated under the Asset Purchase Agreement, which specifies that Steward must “resolve any disputes arising under or related to the APA.”
Although Hoffman doubted the total number Steward is liable for, as the contracts for both parties are vague in stipulating the cause for 12-month severance pay, he did set motions down for further hearing on their request for an order directing Steward to pay the claims, the filing reads.
However, Hoffman denied the executives a claim to the $38 million Steward had paid to creditors, saying that “administrative expense status” would only be granted if their contracts were also tied to their length of service, which in this case it was not.
Steward has until late February to file a response to the executives’ claims.