Quest Diagnostics Unit Buys Bankrupt True Health for $8.5 Million

True Health Diagnostics LLC won bankruptcy court approval to sell its business to a subsidiary of Quest Diagnostics Inc. for $8.5 million.

The acquisition by the subsidiary, Cleveland HeartLab Inc., will provide True Health’s Chapter 11 estate with a greater recovery than any other alternative, True Health said in court filings. A Delaware bankruptcy judge on Sept. 20 approved the deal after Cleveland HeartLab submitted the only bid prior to a Sept. 13 deadline.

True Health, based in Frisco, Texas, filed for bankruptcy at the end of July, weakened by allegations of fraudulent billing that led the federal government to ...