$500 Million Suit Seeks to Force Out Maimonides Trustees

By Reuvain Borchardt

BROOKLYN — Patients alleging mistreatment at Maimonides Medical Center have initiated a $500 million class-action lawsuit against the hospital, seeking to push out a majority of its board of trustees, the latest shot in a year-long attack on the hospital and its executives.

The suit alleges that Maimonides’ “cozy circle of managers and Trustees have focused too long on enriching themselves and their allies via a ‘pay-to-play’ system that rewards donors and insiders, depleting the Hospital of the funds necessary to staff and operate even a reasonably-adequate medical facility.”  

The borough’s largest hospital, situated on the border of the Borough Park and Sunset Park neighborhoods, has been a South Brooklyn fixture for decades, serving the large Jewish, Asian and other diverse communities in the area.

But Maimonides is facing financial difficulties, having lost $145 million in 2021, and has recently had to rely on government funding to make ends meet. Patients frequently complain of long wait times and understaffing, and the hospital is ranked last in the state in patient satisfaction according to the state Health Department. Maimonides leadership says the hospital provides good medical care but is suffering from patient dissatisfaction and financial problems that it largely attributes to low reimbursement rates by Medicaid, which a significant portion of its patients use.

A group of community activists last year formed an organization called Save Maimonides, with the stated goal of forcing change at the hospital. Community newspapers last year were inundated with competing ads from Save Maimonides and from Maimonides, alleging either terrible treatment or success stories at the medical center.

Hamodia conducted extensive interviews last July with Maimonides CEO Ken Gibbs and Chairman of the Board of Trustees Eugene Keilin; and Mendy Reiner, founder of Save Maimonides. Reiner said then that Save Maimonides was not looking to force out Gibbs and the other executives, and only seeking to install independent oversight of the hospital’s finances to ensure the best outcomes for patients. But in December, Save Maimonides delivered 30,000 petitions to the Health Department calling for a change in Maimonides leadership, because, Reiner told Hamodia, “since our campaign began … Maimonides leadership has taken no steps to actually improve the hospital; they have just blamed us for undermining the hospital. How can we undermine a hospital that is already ranked lowest – how much lower can it get?”

The lawsuit was filed Monday in Brooklyn Supreme Court, by attorney Y. David Scharf of the Morrison Cohen law firm, on behalf of four clients who allege mistreatment at the hospital. The complaints include long wait times, understaffing and missed diagnoses. (Save Maimonides is not a named plaintiff. Stu Loeser & Co., a public-relations firm that has worked with Morrison Cohen for years — and previously represented Save Maimonides but told Hamodia it no longer does — sent a press release Tuesday announcing the suit and providing an email address for anyone alleging mistreatment at Maimonides to join the intended class-action suit.)

The suit alleges that financial mismanagement by a self-dealing board has destroyed the hospital by: installing Gibbs as president and CEO in 2016 due to his close relationship with Keilin, despite Gibbs’ having no prior experience in health-care management; more than tripling Gibbs’ compensation between 2016 and 2020; using the hospital for personal gain such as by appointing as trustee a business executive whose company subsequently hired Gibbs’ son; making charitable contributions to entities affiliated with trustees; and spending more than $20 million in business transactions with companies involving mostly unnamed “interested persons.” (Keilin told Hamodia in the interview last July that Gibbs’ sharply increased compensation in 2020 was not a raise or a bonus, but compensation that was deferred, per Gibbs’ contract with the hospital, until Gibbs had completed five years as CEO.)

The suit, against Gibbs and each of the trustees, alleges violations of New York’s Not-For-Profit Corporation Law, Maimonides’s own bylaws, and New York Patients’ Rights Law. It seeks $500 million to be split among members of a proposed class of plaintiffs mistreated at Maimonides, and for the Court to order “immediate elections for a majority of the Trustee positions and bar all presently-serving Trustees for standing for re-election to those slots.” 

Maimonides said in a statement Tuesday, “We take all patient concerns seriously and are proud of Maimonides’ long standing track record of community service and clinical excellence for which we are recognized by independent organizations. Unfortunately, this lawsuit contains the same discredited arguments and malicious personal attacks that the so-called Save Maimonides campaign has been recklessly hurling for nearly a year, dressed up now in legal jargon. Those who understand Maimonides and the type of challenges it faces as a safety net institution — physicians, community leaders, elected officials, and our labor partners 1199-SEIU, NYSNA, and CIR — see this campaign for what it is and have all publicly opposed it.  We will defend the institution against these baseless allegations if we must, but we will continue to keep our focus squarely on providing the highest quality services for the hundreds of thousands of Brooklynites who trust Maimonides with their care.”

The lawsuit is available by clicking here

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rborchardt@hamodia.com