Well, that’s settled ...
... but Spheris, Community offer no specifics
Spheris, a medical transcription provider that is in bankruptcy, and Community Health Systems have reached a settlement, according to bankruptcy court records, but neither company will specify what the settlement settles.
In October 2008, Community agreed to hire Spheris to provide transcription services to all of its hospitals, to invest $10 million in the company and to place two Community executives on Spheris’ board. Both companies are based in Franklin, Tenn.
Wayne Smith, chairman, president and CEO of Community, had joined the board of Total eMed in 2001; that company merged with another medical transcription company, EDiX, to form Spheris in 2003. Smith stepped down from the board of Spheris when Community made its investment, according to Spheris’ October 2008 announcement of the investment. The two executives who joined the board of Spheris at that time also have stepped down, Spheris spokeswoman Lisa DeMoss said.
The settlement allows the transfer of $9.2 million that can be traced back to that investment between Spheris affiliates, but it does not represent a settlement payment from Community to Spheris, as some previous news reports have indicated, DeMoss said.
Neither DeMoss nor Tomi Galin, a spokeswoman for Community, would provide any other details about the settlement. Community remains a customer of Spheris’ transcription services, Galin said.
When Spheris filed for Chapter 11 protection on Feb. 3, it also announced a $75.2 million deal to sell its domestic assets to MedQuist, Mount Laurel, N.J., and its Indian subsidiary to a wholly owned affiliate of CBaySystems Holdings, which is based in the British Virgin Islands and is the principal investor in MedQuist. An auction giving other investors a chance to bid is scheduled for April 13 in U.S. Bankruptcy Court in Wilmington, Del., according to MedQuist.