Epstein Becker Green procured a significant out-of-court victory for an opioid treatment center operator that was faced with the termination of its depository banking relationship on extremely short notice. The termination would have been catastrophic to our client because its revenue cycle vendor was linked to the bank in question. Thus any change in banking relationship, especially one on short notice, would have caused massive short- and long-term disruptions to its revenue stream, as well as significant additional costs to address the change in its informational technology setup.
The underlying trigger for the bank’s decision to terminate the relationship was its learning of a recent publicly disclosed settlement the client entered into over state and federal whistleblower False Claims Act (FCA) and other claims. Our attorneys, led by Lynn Shapiro Snyder and assisted by David Weiss, Ken Kelly, and Virginia Wilson, quickly recognized that the bank likely did not fully appreciate that the settled claims were among those types of claims that, unfortunately, many companies operating in the health care industry face at some point.
To address this inequity, we first contacted the bank’s internal counsel to lay the groundwork for a reconsideration of the bank’s decision, or at least an extension of the time to transition to a new bank before our client’s accounts were closed. Our outreach was summarily rejected by in-house counsel, and the bank refused to explain the reason for the abrupt termination. Then, knowing that a litigation strategy was likely futile given the broad discretion the bank had in terminating depository accounts on short notice, we assisted the client in preparing a letter, and decided to send it directly to the bank’s chief risk officer. In the letter, the client articulated in its own words the various ways in which the bank may have overestimated the risk of continuing the banking relationship with our client, vis-à-vis the true bad actors in this arena who posed legitimate business, legal, and reputational risks to the bank. We drew upon our in-depth knowledge of health care and banking laws and practices, including the terms of settlement agreements in FCA and whistleblower lawsuits, and our zealous advocacy in crafting arguments to support our client’s position. To our client’s profound satisfaction, the bank agreed to rescind its termination decision in its entirety.