Morrison Cohen Files Class-Action Lawsuit Against Maimonides Hospital Board of Trustees

Morrison Cohen has filed a $500 million class-action lawsuit on behalf of four clients against executives and board members of the Maimonides Medical Center in Brooklyn, whom the plaintiffs claim have diverted hospital resources into their own pockets at the expense of patient care and community health. The suit calls for the Court to order new trustees for the failing hospital.

The lawsuit details a culture of self-dealing at Maimonides Hospital – currently the lowest ranked hospital for patient satisfaction in New York State – claiming that its resources are diverted into "bloated" salaries for management, insider contracts to companies owned by the trustees, donations to charities affiliated with the trustees and "decadent marketing strategies," like the recent purchase of the naming rights to the Brooklyn Cyclones baseball stadium.

The suit says that much of the hospital's problems stem from the selection of Ken Gibbs as CEO in 2016. Gibbs, a former banker with no relevant experience in the medical or health management field, tripled his salary from 2016 to 2020, while guiding the formerly profitable hospital to the brink of bankruptcy, according to an audit by PricewaterhouseCoopers.

Y. David Scharf, who is representing the plaintiffs along with Christopher Milito and Jaimie L. Fitzgerald, said, “Maimonides is in a great neighborhood serving diverse communities of hard-working Brooklynites. They deserve a great hospital, not a failing one.”

The case, Mann et al. v. Gibbs et al., case number 516251/2023, was filed in the Supreme Court of the State of New York, Kings County.

Read more:

Law360: NYC Hospital Execs Hit With $500M Self-Dealing Class Action (available to subscribers only)

Hamodia: $500 Million Suit Seeks to Force Out Maimonides Trustees