The sale this time, Resurrection leaders told us, was more about the faltering hospital group's dire overall finances than about West Sub's prospects. True, the combo of West Sub and Westlake made up 40 percent of the $73 million in losses last year for Resurrection. But it was the smaller, weaker Westlake that was the true drain on the system - losing $35 million on revenues of $104 million. That's unsustainable.

Defendants downplayed incidents at the Company’s facilities, indicating that the deficiencies had all been resolved. Defendants assured investors that corrective actions had already been taken at the Company’s facilities to improve the quality, safety and risk management. Additionally, defendants issued materially false and misleading statements regarding the Company’s financial results and compliance with Generally Accepted Accounting Principles. Specifically, the Company failed to properly account for its contingent liabilities related to the deficiencies surrounding its operations.