Cathie Reid ramps up legal fight over $2.5bn health empire

Queensland richlister Cathie Reid has ramped up her legal battle with the new owners of the multibillion-dollar health empire she and her husband built from scratch.

Queensland richlisters Cathie Reid and Stuart Giles.

Queensland richlister Cathie Reid has launched a counter offensive in an increasingly bitter legal battle with the new owners of the multibillion-dollar cancer clinic empire she and her husband built from scratch more than 30 years ago.

Reid and husband Stuart Giles are being sued for $13m by the Icon Group, which was taken over by Swedish private equity group EQT in a $2.5bn deal last year, over alleged delays in payments for medicines to eight hospital pharmacies still operated by Reid and Giles. A claim lodged by Icon subsidiary Slade Health in the Victorian Supreme Court in March alleges the breach of payment terms for the supply of the pharmaceuticals to the pharmacies that the couple had originally planned to sell to pharmacist and former business partner David Slade as part of the Icon deal.

Slade Health is a chemotherapy compounding business that is a fully owned subsidiary of Icon Group and founded by pharmacist David Slade, the proposed purchaser of the pharmacies. In a defence lodged in the court last week, Reid claims the legal action was directly linked to the failure of Slade Health to complete the $43.2m sale of the remaining pharmacies held by Reid and Giles.

That deal was supposed to be completed in a series of transactions that were intended to completed before Icon Group, which provided the management services to the pharmacies, underwent its next ownership transition.

Reid asserts in her defence that complaints about the payment terms - that Slade allegedly changed from 60 days to 30 days - only surfaced when she and Giles complained about Icon’s “failure to perform their obligations” under the pharmacy sale deal.

Stuart Giles and Cathie Reid

“The transaction contemplated ... failed by reason of breaches by the Slade parties,” the claim states. Reid is now making a counterclaim alleging Slade Health acted unconscionably in its conduct and seeking damages.

Reid in comments made earlier said she was disappointed with the legal action and “we now prepare to face off in court against people who were not only colleagues but previously viewed as trusted friends.”

“One of the great lessons that working in healthcare and cancer care in particular provides is the importance of living in the moment and making the most of the good times, because you truly never know what is around the corner,” she said on her website.

“For a variety of reasons not all of the pharmacy transactions had completed by the time Icon was acquired by EQT in March last year. At that time we still had strong hope that the pharmacy transactions would complete as originally planned, allowing us to continue with our plans for life after nearly three decades.

“Unfortunately it became clear that there was no interest in any of the resolutions we were proposing. Long term relationships quickly shifted from collaborative conversations to a bombardment of legal letters, while we continued to propose and work through possible resolutions.” The couple added that they were incredibly proud of the legacy and “impact we’ve created at Icon and the last thing we wanted was to see that damaged or destroyed, or even worse create any kind of negative impact for patients or the wonderful teams of people who provide their care.”