Hadassah Faces Lawsuit for Not Compensating Crisis Consultants

Lawsuit alleges the organization was on verge of losing its hospital and derived benefits worth 1.25 billion shekels from firm

A nurse holds a newborn baby at a nursery in Hadassah Ein Kerem Medical Center in Jerusalem September 10, 2015.
\ RONEN ZVULUN/ REUTERS

A consulting company is suing the Hadassah women’s organization 75 million shekels ($20.9 million) for failing to compensate them for work done during its 2013-2014 debt crisis.

Strategic adviser David Spector and media consultant Racheli Goldblatt assert that their firm, The Free World, helped solve the crisis gripping Hadassah’s medical center in Jerusalem, but never received payment. According to the document filed, the hospital was bankrupt and Hadassah was in danger of losing control of it. The plaintiffs assert the hospital was facing nationalization or being handed over to one of the Israeli HMOs. The organization would cease to exist in such a situation because it depends on the hospital as a source of donations, from which it takes a 14% cut. It also depends on the hospital because of profits of the hospital’s subsidiaries in the fields of technology commercialization, medical checkups and other areas.

The recovery plan and the agreement signed with the state, which was reached in June 2014, “were obtained under Spector’s full direction and orchestration” and were “an overwhelming achievement” for the women of Hadassah, the plaintiffs state. They also say that the plan provided the organization economic benefits worth 10 billion shekels as a result of state grants, the maintaining of the organization’s real estate holdings and Hadassah’s exclusive arrangement to raise funds for the hospital.

Spector spent day and night putting together the deal, according to the lawsuit, and was praised by Hadassah leaders at the time, as expressed in emails included in the lawsuit. Spector states he started working on the crisis for Hadassah in late 2013, not only as a strategic adviser but also as Hadassah’s representative in negotiations with the government.

However, the lawsuit alleges, he signed no work contract regarding the Hadassah crisis because of a lack of good will on the part of Hadassah. Free World was supposed to continue working with the hospital to implement the recovery plan. However, a dispute arose between Spector and Hadassah leaders in November 2014, particularly with Audrey Shimron, Hadassah Israel’s executive director, and Marcie Natan, Hadassah’s national president during the crisis.

Free World justified the size of the lawsuit by noting that it does not exceed 6% of the direct value of the benefits Hadassah derived from its services, estimated at 1.25 billion shekels, at a time when other consultants received a higher commission.

Hadassah commented: “Filing the lawsuit is Spector’s attempt to threaten the organization with false allegations in order to get hold of millions of shekels he doesn’t deserve. We regret that Spector doesn’t loathe spreading baseless slander in hopes that it will help him. This is his second attempt to sue for such an absurd sum after trying to sue the hospital itself. We have no doubt his claims will prove baseless in court.”