The Nystrom and Associates lawsuit that draws the most attention was filed on July 31, 2024, when founders Brian and Peter Nystrom sued Nautic Partners and CEO Mark Peterson in Anoka County District Court, alleging a “deceptive takeover” of the Minnesota behavioral health company their family built.1Trellis Law. Brian Nystrom, Peter Nystrom Vs Nautic Partners, LLC, Mark Peterson
Who Is Suing Whom
Brian Nystrom, a licensed social worker, founded Nystrom & Associates Ltd. and grew it into one of the Upper Midwest’s largest outpatient behavioral health providers. In 2019, the private equity firm Nautic Partners acquired a majority stake in the company.2Behavioral Health Business. Nystrom Associates Strikes Deal to Acquire 25 of Ellie Mental Health’s Clinics In January 2023, Nautic installed Mark Peterson as CEO, replacing Mark Arnold.3BusinessWire. Nystrom Associates Names Experienced Behavioral Health Leader Mark Peterson CEO
The plaintiffs are the two founding family members. The defendants are Nautic Partners LLC and Peterson personally.
What the Complaint Alleges
The complaint characterizes the transaction as a “deceptive takeover of Nystrom & Associates, Ltd.” It claims Nautic misrepresented facts during the business transaction and later breached promises made to the founders.1Trellis Law. Brian Nystrom, Peter Nystrom Vs Nautic Partners, LLC, Mark Peterson The case was assigned to Judge Kevin J. Mueller.
Court records show a notice of motion was filed at the time of the complaint. Public reporting has not detailed which specific promises the Nystroms say were broken or what relief they are seeking. The case remained pending as the company continued to operate and expand.
How the Founders Left the Company
Months after Peterson became CEO, both founding brothers were out of their executive roles. On April 27, 2023, Brian Nystrom announced publicly that he had “resigned,” while Peter Nystrom said he had been “dismissed” by the company’s “new management.”4Behavioral Health Business. Nystrom Associates Splits With 2 Founding Family Execs Both remained shareholders and board members. Neither the company nor Nautic Partners responded to press questions about the departures at the time. That split, roughly 15 months before the lawsuit was filed, foreshadowed the founders’ claim that the post-acquisition arrangement had not gone as they were promised.
What Has Happened at the Company Since
While the founder suit was pending, the business kept growing. In mid-2025, Nystrom & Associates acquired 23 Minnesota clinics from Ellie Mental Health, bringing the combined organization to 84 locations across five states.5PR Newswire. Nystrom Associates Acquires Ellie Mental Health Minnesota
In October 2025, the company announced it was unifying its brands under a new name, Sagent Behavioral Health. The rebrand pulled together Nystrom & Associates, the acquired Ellie operations in Minnesota, LifeWorks and Psychiatric Associates in Iowa, Sandhill Counseling and Consultation in Missouri, and Vantage Point in Wisconsin.6PR Newswire. Nystrom Associates Brands Unite Under New Name Sagent Behavioral Health Sagent now employs roughly 2,000 people, including about 1,600 clinicians, and handles about 1.4 million appointments per year.
In April 2026, Peterson stepped down as CEO and was succeeded by Shawna Gisch. Peterson remained on the board. In a statement, he described his role as having been to “guide Sagent through a critical period of transition and position the organization for long-term success.”7Pulse2. Sagent Behavioral Health Shawna Gisch Appointed CEO to Lead Next Phase of Growth The company’s substance use disorder treatment licenses with the Minnesota Department of Human Services remain active with no public disciplinary actions on record.8Minnesota DHS. Licensing Information Lookup – Nystrom and Associates Ltd
Other Cases Involving the Company
The founder suit is separate from earlier litigation naming the company. In 2009, the Minnesota Court of Appeals decided Desmonde v. Nystrom Associates, Ltd., a defamation and business-interference case brought by a psychologist after a clinic office manager reported a suspected prescription forgery to police; the company won on qualified-privilege grounds.9Justia. Desmonde v. Nystrom Associates, Ltd. In 2021, the company was named as a defendant in a federal civil rights case, Nordgren v. Hennepin County, filed under 42 U.S.C. § 1983 in the U.S. District Court for the District of Minnesota; that case was terminated in August 2021 after motions to dismiss and for judgment on the pleadings, with the public docket not showing the basis for termination.10CourtListener. Nordgren v. Hennepin County Neither case is connected to the founders’ claims against Nautic Partners.