RICHMOND, Va. — The trustee overseeing the bankruptcy liquidation of former Richmond blood testing firm Health Diagnostic Laboratory has filed a sweeping lawsuit against more than 100 defendants, including the company’s cofounders, directors and shareholders.
The case, filed in federal bankruptcy court in Richmond on Friday, seeks to place blame for the company’s downfall on the shoulders of HDL insiders and sales contractors, and aims to recover more than $600 million in damages.
The 205-page lawsuit alleges 76 counts against the various defendants, including fraud, unjust enrichment, negligence, corporate waste, conspiracy and breach of fiduciary duty.
It follows on the larger theme of previous lawsuits filed by the Department of Justice and large insurance companies that claim HDL’s rapid rise and fall was due in large part to business practices that allegedly violated federal anti-kickback laws and abused federal medical programs like Medicare.
“HDL’s apparent success was based on a business model that used kickbacks and improper referrals to encourage and induce (health care providers) to order unnecessary tests,” the case states. “That created a ticking time-bomb that was destined to explode.”
The lawsuit’s ultimate goal is to force the defendants – essentially anyone who may have caused or benefitted from the alleged conduct – to return money they received as a result during the six years prior to HDL’s bankruptcy filing in June 2015.
It will also likely trigger insurance policies that HDL had to protect its former officers and directors.