A health care entity that had considered partnering with Beaufort Regional Health System is being sued by Tenet Healthcare Corp. over allegedly “improper admissions” of some hospital patients.

The suit follows an aborted CHS bid to buy Tenet.

In a document filed Monday with a federal District Court in Dallas, Texas, Tenet alleges CHS violated federal securities laws by “failing to disclose its improper business practices and substantial liabilities” and making “misleading statements and material omissions to its own shareholders.”

Media reports indicated the heart of the suit was Tenet’s allegation that CHS overbilled for Medicare patient admissions to hospitals.

Shares in both publicly traded entities involved in the dispute fell on news of the lawsuit, according to national media.

Tomi Galin, CHS vice president for corporate communications, referred a request for comment to a statement released earlier this week.

“Tenet’s allegations are completely without merit and we intend to vigorously defend ourselves against these unfounded and irresponsible claims,” the CHS statement reads, in part.

A Franklin-, Tenn., based company, CHS was one of four suitors that had pursued entering into a management or lease/purchase agreement with Washington-based BRHS.

Last year CHS proposed leasing the cash-strapped BRHS for 30 years with two 10-year renewal phases at fair-market value and a prepaid lease of $30 million.

Citing public division, and a judge’s 10-day injunction temporarily barring movement toward an agreement with BRHS, CHS permanently withdrew its offer in January.

The BRHS Board of Commissioners is negotiating a final lease/purchase deal with Greenville-based University Health Systems of Eastern Carolina, the only suitor remaining in the field.

The county owns the BRHS buildings, and the Beaufort County commissioners will have final say over whether to accept the lease/purchase agreement with UHS.