Flint, MI– McLaren Hospital has been granted an additional two months to decide whether to stay or walk away from the Flint water lawsuit settlement.
The $641.25 million settlement, announced in August of last year, would resolve all litigation related to the water crisis against the State of Michigan, the City of Flint, Rowe Engineering, and McLaren Hospital.
The State of Michigan is contributing $600 million, the City of Flint is contributing $20 million, and Rowe Engineering is contributing $1.25 million. McLaren Hospital was set to contribute $20 million, although they may end up walking away, bringing the settlement total down.
McLaren has the right to walk away from the settlement agreement if the people who allege exposure to Legionella at McLaren Flint Hospital do not register for the settlement. So far, a majority of those people did not register for the settlement, but McLaren has requested more time to make their decision.
On Sept. 28, the McLaren defendants requested a “stay” of the Oct. 10, 2021 deadline that they were given to pay their agreed amount to the settlement fund. Specifically, they asked for an additional 60 days.
In their request, McLaren defendants wrote that “circumstances have developed as such that it is not reasonable or appropriate to require the McLaren Defendants to tender the final payment,” on Oct. 10.
The settlement agreement gives McLaren 30 days from the release of the final registration list to decide whether or not to walk away. Since that list has not yet been released, the Oct. 10 deadline would conflict with the right to a 30-day decision period.
The McLaren Defendants requested this extension to “avoid unnecessary administrative complications, costs, and related issues that may arise if the payment is tendered before the deadline for the McLaren Defendants to decide whether to exercise their rights,” to walk away.
On Oct. 6, U.S. District Court Judge Judith Levy granted their request, upon receiving no objections from other settling parties, including the city of Flint.
There was, at one point, another alternative to McLaren walking away from the settlement entirely.
On Sept. 13, a resolution came before the Flint City Council for McLaren to reduce their contributions to the settlement from $20 million to $5 million, rather than walking away. Other settling parties had agreed to allow McLaren to remain in the settlement at reduced contributions, but the council voted against it.
The city council’s vote of approval was required for McLaren to remain in the settlement with a lesser contribution, as the city of Flint is a settling party. Without the council’s vote, McLaren was left with only the options of staying in for the full $20 million, or walking away completely.
Judge Levy still has yet to issue final approval of the settlement.