Altru Health System is facing a class-action lawsuit alleging that its leaders mismanaged the company's retirement investments — failing to choose the most cost-efficient, profitable ways to invest funds.
The suit, filed on Wednesday, Sept. 9, in North Dakota District Court, is led by three plaintiffs — two in Fargo and one living in central Georgia, all apparently former Altru employees. A nearly 50-page complaint claims financial mismanagement in a range of subtly different ways. Many of them come down to small efficiencies that investment leaders apparently didn't choose or investigate, plaintiffs say, like lower costs for investment management.
And those small inefficiencies, attorneys argue, have compounded, costing participants millions. They're seeking a range of changes at the company and financial damages for clients, including a court order to make Altru reimburse its retirement plan for any losses associated with its alleged mismanagement.
"Defendants failed in their fiduciary duties either because they did not negotiate aggressively enough with their service providers to obtain better pricing or they were asleep at the wheel and were not paying attention," the complaint against Altru reads. "Either reason is inexcusable."
The case comes as Altu staggers out of one of its worst financial years in memory, with layoffs and a pause in hospital construction just months ago amid the coronavirus pandemic. COVID-19 wreaked havoc on health care industry finances this summer, a pain felt particularly acutely at Altru because of the structural failure of its main clinic in 2016.
Donald Reavey, a Pennsylvania attorney representing the plaintiffs, declined to comment on the case in an email to the Herald.
The suit lists a broad range of defendants, including a swath of Altru leadership, investment managers and prior executives. Annie Bonzer, a spokeswoman for Altru, did not comment on the substance of the case.
"We are aware of the situation and look forward to the opportunity to respond to the complaint," Bonzer wrote in an email.