George Washington University is suing its corporate partner at the Foggy Bottom hospital campus for $100 million, alleging that Universal Health Services—which is the majority owner of the hospital—has been pocketing too many profits and leaving the medical school and doctors in the lurch.

GWU alleges that UHS has improperly diverted $100 million from hospital revenue to pay itself. “Instead of investing sufficient Hospital revenue in the University’s research and teaching … UHS has paid itself these funds in the form of outsized dividends from artificially inflated, excess profits,” the complaint reads.  It was filed in D.C. Superior Court last Friday on behalf of the university and medical faculty associates.

The Washington Post was the first outlet to report on the lawsuit.

The suit alleges that the medical school doesn’t have the resources that it needs even as the hospital averages operating margins of about 13.5 percent (drastically higher than the median for teaching hospitals, which is 2.4 percent, according to the university).

“While the hospital and the for-profit UHS are virtually printing money, the Medical School and MFA are struggling financially, and rely upon cross-subsidies from larger University operations and resources for their survival,” the suit reads.

Universal Health Services tells DCist in a statement that the university is just trying to find a way out of an old partnership agreement that new university leaders are unhappy with.

“This lawsuit is nothing more than an attempt by the new leadership of the university to renegotiate—via litigation—agreements it entered into over 20 years ago,” the statement reads. “UHS regrets that GWU’s new leadership has elected to file an unfounded lawsuit, to the substantial expense and distraction of all involved, rather than attempt to resolve its business concerns through good faith discussions.”

What’s more, UHS says, the company has been instrumental in making the teaching hospital as successful as it is. It bought an 80 percent stake in the hospital in 1997, when the hospital was struggling financially, and spent millions outfitting and renovating the building. “UHS transformed a struggling hospital into a nationally recognized, leading academic institution with multiple distinctions and certifications,” the statement reads.

The lawsuit could spell danger for GWU Hospital’s deal with the city to open a hospital on the east end of the city, at the site of the St. Elizabeths East campus in Ward 8. That deal has already been fraught, and part of the conflict has been UHS’s insistence on building 200 more beds at its Foggy Bottom campus to help pay for the new project in Ward 8. GWU has always been against that plan, and eventually the school’s opposition led to the repeal of a D.C. Council bill approving the deal.

The city and GWU are still in talks, trying to draft up a new version of the agreement that will then have to be approved by the D.C. Council. But the new lawsuit could further stall conversation with the city (and perhaps give councilmembers pause in approving a deal), given that the parties who would be running the new hospital aren’t even in agreement about how to run their first one.

The Ward 8 hospital is badly needed by communities living east of the river. The majority-black neighborhoods there do not currently have access to a full-service hospital. United Medical Center, the city-run hospital in Southeast, has suffered from serious management problems and medical mistakes, and it had to shut down its obstetrics unit last year after medical errors endangered patients giving birth there.

Ward 7 Councilmember Vincent Gray, who has consistently championed the GWU deal, told the Post that he’s not sure how this lawsuit might affect the Ward 8 project.

“I’m going to continue to monitor this as closely as I possibly can,” Gray told the outlet. “I think we’re poised and ready to go forward, and I think that’s what we should do at this stage. I suppose anything could happen, but I’m hopeful that we can keep our eyes on what’s most important here.”

The new hospital is supposed to open up in 2022.