MedCath still plans to dis­solve in spite of part­ners’ law­suit

Modern Healthcare - - LATE NEWS -

MedCath Corp., Char­lotte, N.C., said it was pro­ceed­ing with plans to dis­solve af­ter re­view­ing a law­suit filed against the com­pany by its for­mer joint ven­ture part­ners in the own­er­ship of TexSan Heart Hospi­tal, San An­to­nio. The suit, filed Sept. 18, ar­gues that MedCath and af­fil­i­ated en­ti­ties breached cer­tain con­trac­tual obli­ga­tions, as well as fidu­ciary and other du­ties owed the physi­cians as a re­sult of the sale of the hospi­tal and de­fend­ing against Jus­tice Depart­ment al­le­ga­tions that are part of a pend­ing na­tional in­ves­ti­ga­tion into im­plantable de­fib­ril­la­tors, ac­cord­ing to a Se­cu­ri­ties and Ex­change Com­mis­sion fil­ing. The plain­tiffs seek com­pen­satory dam­ages of $3.3 mil­lion, as well as $6.6 mil­lion in ex­em­plary dam­ages and other re­lief. MedCath will vig­or­ously de­fend it­self against the suit, ac­cord­ing to the fil­ing. MedCath also said it would pro­ceed Sept. 21 with plans to dis­trib­ute $6.33 per share of com­mon stock to share­hold­ers of record Sept. 10, and file a cer­tifi­cate of dis­so­lu­tion in Delaware, ac­cord­ing to the fil­ing. MedCath tele­phone num­bers listed on SEC fil­ings were not work­ing and the for­mer physi­cian own­ers of TexSan who filed the suit in Bexar County (Texas) Dis­trict Court and are af­fil­i­ated with SAHH Hospi­tal Man­age­ment, could not be lo­cated. MedCath and SAHH-af­fil­i­ated en­ti­ties sold TexSan for $78.5 mil­lion plus re­ten­tion of work­ing cap­i­tal to Methodist Health­care Sys­tem of San An­to­nio in De­cem­ber 2010, with MedCath net­ting about $58 mil­lion, ac­cord­ing to an SEC fil­ing.

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