Cognosante Sued for Post-Deal Payments by Founder of Acquisition

The founder of defense contractor Enterprise Information Services LLC sued its acquirer, Cognosante LLC, claiming the health technology business is misclassifying certain federal contracts to get out of making post-transaction payments.

The lawsuit, made public Thursday, accuses Cognosante of breaching deal terms requiring it to calculate “earnout” payments to Vinod Goyal and other former co-owners based on the number of government contracts booked through assets or expertise associated with EIS.

Cognosante is wrongfully excluding contracts it would never have been eligible for before the merger, when its business was narrowly focused on IT services in the health care sector, according ...