Ascension, TowerBrook Face Challenge to R1 RCM Stock Restructure

Providence, R.I., filed suit in Delaware against Ascension Health Alliance and TowerBrook Capital Partners LP, claiming they’re using their control over R1 RCM Inc. to recapitalize the health care billing company on terms that accelerate their long-term benefits at the expense of public investors.

The health chain and private equity firm are getting the best of both worlds by converting their preferred shares into common stock, the lawsuit says: the increased liquidity and reduced risk of a short-term investment, plus eight-figure dividend payments associated with a long-term position.

They’re wrongly diverting “hundreds of millions of dollars” to themselves, according to ...