IOWA CITY, Iowa ( Iowa Capital Dispatch ) - The bankrupt Mercy Hospital of Iowa City is taking its former business partners, MercyOne and Catholic Health Initiatives, to court in a dispute over $55 million.

A federal lawsuit, filed on behalf of the Iowa City hospital and its creditors, accuses MercyOne and CHI of scuttling a planned business deal so as to avoid the obligation of paying workers’ pensions while giving a six-figure severance package to a former top executive who often failed to show up for work.

The claims within the lawsuit, originally made in August as part of Mercy-Iowa City’s ongoing bankruptcy case, are now a separate cause of action that alleges breach of contract, unjust enrichment and breach of fiduciary duty.

MercyOne and its fellow defendants have yet to file a

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