Former owner of bankrupt imaging chain dealt setback in decade-long legal battle with US Bank
A Pennsylvania panel of judges has dealt the former owner of a now-defunct chain of imaging centers another blow in a years-long court battle with U.S. Bank.
Businessman Maury Rosenberg had sought to collect legal damages from the Minneapolis lender, after it forced his National Medical Imaging into involuntary bankruptcy for defaulting on equipment leases. However, the three-judge panel ruled Thursday that the involuntary bankruptcy filing did not push NMI out of business, as the chain was already in financial decline, Law360 reported Friday.
“…[U.S. Bank’s] behavior was not egregious enough to justify punitive damages and NMI cannot prove the involuntary bankruptcy proximately caused it any harm," Circuit Judge Kent Jordan and colleagues wrote Thursday. “Indeed, there can be little doubt that NMI was on the brink of failure when the involuntary bankruptcy petition was filed,” they added later.
The ruling is the latest in a legal back-and-forth that dates back more than a decade. Entities related to U.S. Bank first filed bankruptcy petitions against NMI and Rosenberg in 2008, as the global recession started taking its toll on the company. His case was later transferred to Florida and dismissed. Rosenberg countersued and a jury awarded him $6.1 million in compensatory and punitive damages (though he had been seeking $450 million). And U.S. Bank filed yet another suit that found the businessman from Philadelphia liable for $6.5 million in damages, fees and costs to the lender.
The New York Times detailed Rosenberg’s David v. Goliath-like odyssey fighting the giant corporation in a 2014 profile story. Back then, he told the newspaper that he had spent his every last penny fighting the company in court—totaling more than $6 million at the time.
“If they can do this to me, imagine what they do to people that can’t defend these actions. I’m truly learning that it doesn’t matter if I’m right or wrong because they keep filing more and more appeals and motions. It’s getting to the point that I can’t afford the legal fees and I can’t ask my attorneys to work for free,” Rosenberg told the Times.
U.S. Bank has argued that NMI’s business was already in decline prior to the involuntary bankruptcy filing. Since 2005, declining Medicare reimbursements had taken their toll, and by late 2008, the firm had closed most of its locations outside of Pennsylvania. At its peak, National Medical Imaging operated 23 outpatient radiology screening centers with 150 employees and $72 million in annual revenue, the Star Tribune reported.
Read more about the case from Law360 below.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.