Sole Owner Liable for $654 Million Default After Discovery Abuse

The sole shareholder of Healthcare Essentials Inc. is liable for a default judgment of over $645 million due to discovery abuse in a lawsuit over an alleged fraud scheme related to a wound therapy system, the Sixth Circuit ruled Tuesday.

Colin Tennebar “committed repeated discovery abuses, including hiding evidence and defrauding the court, after multiple warnings that continued disregard for court orders would result in severe consequences,” Judge Karen Nelson Moore wrote for the U.S. Court of Appeals for the Sixth Circuit.

The underlying case involves KCI USA Inc.’s “VAC” wound therapy systems, which it said Healthcare Essentials illegally acquired, ...