A federal judge refused yesterday to block shareholders of Northern Virginia Doctors Hospital from voting today on the proposed sale of the facility to a Tennessee-based, for-profit hospital management corporation.
A temporary restraining order that would have delayed the vote for 50 days was sought by the Arlington Hospital Foundation Inc., which has submitted its own, last-minute bid to buy the 225-bed hospital. The foundation runs Arlington Hospital, the county's nonprofit 350-bed hospital.
Directors of Doctors Hospital agreed in principle last summer to sell the facility to Hospital Corporation of America of Nashville for $19.2 million. The foundation's offer, for $20.1 million, was made Dec. 20 and rejected the next day by Doctors board chairman Dr. John E. Alexander.
Lawyers for the foundation argued yesterday that the Doctors board violated federal securities laws in its solicitation of proxies and had unfairly prevented shareholders from considering their offer.
After a 45-minute hearing in U.S. District Court in Alexandria, however, Judge James C. Cacheris sided with the Doctors board. The judge said Virginia law gives "wide discretion" to corporate directors in presenting issues for shareholder approval. Cacheris also denied the Arlington Hospital group's request that he order the Doctors board to permit foundation representatives to attend this morning's meeting.
"It is not the court's function to get involved in setting ground rules--how many chairs, and whether it'll be pencils or ballpoint pens," Cacheris said.