A hospital management company in Shreveport, La., sued the city of Pocahontas Monday for $1.6 million for canceling its contract to operate the city’s hospital.
In August 2007, Allegiance Health Management Inc. signed an agreement to operate the Randolph County Medical Center, which is now called Five Rivers Medical Center, according to its lawsuit filed in U.S. District Court in Jonesboro.
But less than a year later, Pocahontas’ mayor fired Allegiance. The contract was supposed to run through August 2010, Allegiance said.
The city’s termination of the contract was “wrongful” and breach of the contract, the lawsuit said.
Allegiance said it is entitled to recover the maximum management fee of $50,000 a month, or $1.6 million.
Allegiance’s attorney, R. David Freeze of Texarkana, Texas, couldn’t be reached for comment Monday afternoon.
Pocahontas Mayor Frank Bigger said wasn’t the mayor when Allegiance’s contract was canceled and didn’t know the details surrounding it. The mayor at the time was Gary Crocker.
Bigger said the lawsuit is being handled by the city attorney.
In 2007, Pocahontas residents approved a 1-cent sales tax to buy the hospital for just over $5 million.
The hospital is the only one in the county and serves patients in the neighboring counties and parts of Missouri.
Sign up for Daily E-news
