Former Cano Health CEO Settles $70 Million Florida Lawsuit Over Collapsed Dental Partnership

The former chief executive officer of Cano Health Inc., Marlow Hernandez, has reached a confidential settlement resolving a $70 million lawsuit filed against him by CD Support LLC and Onsite Dental. The settlement, finalized on the eve of trial in the Eleventh Judicial Circuit Court of Florida, concludes a dispute alleging that Hernandez misled both Cano Health’s board and the dental providers in connection with a failed business venture.

Background of the Dispute

The litigation arose from a 2022 agreement under which Onsite Dental acquired the assets of Dental Excellence Partners, a company owned by Hernandez’s wife, for a combination of cash, equity, and a promissory note totaling more than $30 million. In a related deal, CD Support LLC agreed to provide dental business and administrative services within Cano Health’s network of clinics.

According to court filings, the service agreement promised CD Support more than $500 million in projected revenue over a 20-year term. Cano Health committed to pay a guaranteed monthly amount to cover CD Support’s operational costs, which included staffing, billing, and patient management. However, the plaintiffs alleged that Cano Health ceased payments in June 2023, approximately one year into the partnership.

As a result, CD Support claimed it was forced to close its operations, lay off hundreds of employees, and discontinue services to more than 30,000 patients. The company subsequently filed a separate suit against Cano Health for unpaid invoices, though those proceedings were paused after Cano Health filed for Chapter 11 bankruptcy protection in February 2024.

Allegations Against Hernandez

CD Support and Onsite Dental pursued independent claims against Hernandez personally, asserting that he had made material misrepresentations during contract negotiations. The plaintiffs alleged that Hernandez falsely represented Cano Health’s financial stability and claimed that the agreements had been fully disclosed to—and approved by—the company’s board of directors.

The complaint further asserted that Hernandez failed to reveal his conflicted interests, as he had a personal connection to Dental Excellence Partners through his spouse and had participated on both sides of the transaction. Plaintiffs contended that this dual role breached fiduciary duties and deprived Cano Health’s board of the ability to evaluate the deal objectively.

Additionally, CD Support and Onsite alleged that Hernandez misrepresented compliance standards related to patient solicitation. During due diligence, Hernandez reportedly assured the dental providers that offering services to non-Cano Health patients was permissible. However, Cano Health later stated that such conduct had not been approved and could raise regulatory concerns.

The Settlement and Its Implications

The confidential settlement was reached late Sunday evening, just hours before jury selection was set to begin in Miami. While the financial terms remain undisclosed, plaintiffs’ counsel emphasized that the agreement brings finality to a complex dispute that had been pending for over a year.

“The resolution provides plaintiffs with the certainty and closure that will enable them to focus on their business operations and patients going forward,” said attorney Joe Mamounas of Greenberg Traurig LLP, who represented CD Support and Onsite Dental. He added that the settlement “allows all parties to move forward and put their dispute to rest.”

Attorneys for Hernandez did not issue public comment regarding the outcome.

Cano Health’s Bankruptcy and Reorganization

Cano Health, once a publicly traded healthcare provider focused on senior care, filed for Chapter 11 protection in February 2024 amid significant financial strain. The company emerged from bankruptcy four months later, after a Delaware bankruptcy judge approved its reorganization plan in June 2024.

The bankruptcy proceedings stayed litigation against Cano Health but did not preclude claims against Hernandez individually. The settlement with CD Support and Onsite thus closes one of the last major disputes connected to the company’s pre-bankruptcy operations.

Broader Legal Context

The case underscores the risks associated with executive conflicts of interest in closely intertwined corporate transactions. It also highlights the challenges of enforcing long-term service agreements when a corporate counterparty faces insolvency.

For healthcare providers and dental service organizations, the litigation illustrates the importance of rigorous due diligence, especially when related-party transactions are involved. Transparency in disclosures to corporate boards, adherence to compliance protocols, and thorough contractual documentation are all critical to mitigating similar disputes.

The resolution of this case, though confidential, provides a measure of closure for the plaintiffs while allowing Hernandez to avoid the uncertainties of trial. It also signals a broader cautionary note to executives navigating complex, multi-entity healthcare ventures that straddle medical and dental services.

Case Details

Case Name: CD Support LLC et al. v. Hernandez
Court Name: Eleventh Judicial Circuit Court of Florida
Case Number: 2024-007499-CA-01
Plaintiff Attorney(s): Greenberg Traurig LLP
Defense Attorney(s): Raines Feldman Littrell LLP