Franklin, Tennessee-based addiction treatment facility operator Landmark Recovery faces several lawsuits over its business dealings, the latest involving a breach of contract dispute with one of the largest institutional pharmacies in the U.S.
On Dec. 5, Pharmacy Company of America, also known as Pharmerica, filed a lawsuit in the U.S. District Court for the Western District of Kentucky, alleging that Landmark Recovery has not kept its payment obligations under its contract. Pharmerica, which provides institutional pharmacy services to several provider types but is best known for its work in the post-acute space, is seeking about $406,000.
Landmark Recovery has not yet responded to a request for comment.
Pharmerica is a part of the diversified health care company BrightSpring Health Services (Nasdaq: BTSG).
Court documents state that Landmark Recovery and Pharmerica entered into a forbearance agreement on Jan. 18, 2024, to resolve outstanding payments. The documents also state that Landmark Recovery agreed to repay the $406,000 on a specific payment schedule. Further, Landmark Recovery management agreed to sign an “Agreed Order of Judgment” that, pending approval by court, would obligate Landmark to pay back that amount, plus 18% interest, and a number of other covenants, such as paying Pharmerica’s attorney’s fees.
Pharmerica and Landmark originally contracted with each other in May 2022 for services at a site in Tennessee. The deal expanded to nine facilities in May 2023.
Other court documents show that the total amount Pharmerica wants, including interest, would total about $432,000 as of February 2025.
This case and others in the federal court system detail frequent legal skirmishes over payment for contracted services. Addiction Treatment Business has not reviewed state courts for similar cases.
Some cases have reached a resolution. In one case each, Landmark Recovery has been able to take the issue to a settlement and has lost a judgment.
In June 2024, Overland Park, Kansas-based Favorite Healthcare Staffing sued Landmark Recovery, seeking $723,000, plus interest, for nine months of services and alleging that Landmark only ever paid one invoice. Court documents show that the two have reached a settlement. The latest court records show the two want time to finalize the agreement but do not include details of the settlement.
In another staffing agency case, Medix Staffing Solutions sued Landmark Recovery in May 2024. The Chicago-based company sought “approximately $80,000” and got a default judgment for $76,000 in August 2024. Medix filed a writ of garnishment on Dec. 6.
Another case is still pending. Elite Medical Staffing sued over $182,000 in missed payments and alleged violations of contract language forbidding Landmark Recovery from recruiting those who worked for Elite.
Filed in September 2023, the case has been at a standstill since August 2024. Then, the attorneys representing Landmark Recovery said they wanted to withdraw from the case. Court records show that A.J. Henry, now-former executive of Landmark Recovery, told the judge over the case that the company was seeking new counsel. In appearances in September and October, representatives of Landmark told the court they hadn’t found an attorney.
On Dec. 12, the judge over the case ordered the attorneys to withdraw even though Landmark Recovery had not found counsel. The judge also lifted the stay they enacted when the attorney issue cropped up.
Elite Medical Staff is pushing toward mediation; it named one in November 2023.
Landmark Recovery’s once-high-flying trajectory was knocked askew after a string of patient deaths and reports of deplorable happenings in the company’s Indiana facilities. After that, the facilities were shut down by the state government and the company had to cope with that loss with layoffs. Challenges continued for the company with subsequent facility closures, evictions and a new “ownership infusion” to address liquidity issues.
The company reached an agreement with Indiana officials to eventually reopen the facilities with additional oversight. Local media reports show that Landmark Recovery may be readying the facilities to reopen.