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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: October 29, 1996
MedPartners, Inc.
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(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C> <C>
Delaware 0-27276 63-1151076
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(State or Other (Commission (I.R.S. Employer
Jurisdiction of Incorporation File Number) Identification No.)
or Organization)
3000 Galleria Tower, Suite 1000
Birmingham, Alabama 35244
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's Telephone Number, (205) 733-8996
Including Area Code:
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Item 5. OTHER EVENTS
MePartners, Inc. (the "Company") has entered into an agreement with Integrated
Health Servies, Inc. ("THS") in connection with IHS's proposed acquisition (the
"Acquisition") of Coram Healthcare Corporation ("Coram"), pursuant to which the
litigation arising out of the sale by Caremark International Inc., a
wholly owned subsidiary of the Company ("Caremark"), to Coram of Caremark's
home infusion therapy business in April 1995 (the "Coram Litigation") is to be
settled (the "Settlement"). Under the Settlement, all of the approximately
$111.0 million in Coram promissory notes held by the Company will be cancelled
and replaced by a new two year note in the principal amount of approximately
$57.5 million, and, the Company and Coram will enter into long-term preferred
provider agreements pursuant to which IHS/Coram following the Acquisition will
provide services to the patients served by the Company's integrated delivery
systems on a national basis. The consummation of the Settlement is conditioned
upon, among other things, the consummation of the Acquisition. The Company
understands that the Acquisition is subject to the usual conditions for
transactions of such type, including approval by the stockholders of Coram and
IHS. The Acquisition is expected to be consummated early in the first quarter
of 1997. There can be no assurance that the Acquisition or the Settlement will
be consummated.
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Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
(99)-1 Press release dated October 21, 1996
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 29, 1996
MedPartners, Inc.
By /s/ Harold O. Knight, Jr.
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Harold O. Knight, Jr.
Executive Vice President
and Chief Financial Officer
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contacts
Larry R. House Investor Relations
Chairman of the Board, President, CEO Birmingham - Randy Pittman
205-733-8996 205-733-8996
Chicago - Tamra Sweeney
Hal Knight 847-559-4635
CFO, Executive Vice President Media Relations
205-733-8996 Pam Huff
205-733-8996
MEDPARTNERS, INC. ANNOUNCES SETTLEMENT OF CAREMARK-CORAM LITIGATION
-INVOLVES PACT WITH INTEGRATED HEALTH SERVICES, INC.-
BIRMINGHAM, AL - OCTOBER 21, 1996 - With the disclosure today of the proposed
merger between Integrated Health Services, Inc. (IHS) and Coram Healthcare
Corporation, MedPartners, Inc. (NYSE: MDM) announces the settlement of the
litigation involving Coram and Caremark International, a wholly owned
subsidiary of MedPartners, Inc. The settlement is contingent upon consummation
of the merger, expected to come early in the first quarter of 1997.
The lawsuit stems from the sale of Caremark's home infusion business to Coram
in April 1995 for approximately $209 million in cash and $100 million in
securities. The suit and counterclaims allege misrepresentation of various
types by each company. Both actions will be dismissed pending approval of the
proposed settlement.
In recent weeks, MedPartners Chairman of the Board, President and CEO, Larry R.
House and Integrated Health Services Inc CEO, Robert Elkins, M.D. worked
diligently to create a positive business opportunity for both companies, while,
at the same time, to dispose of the lawsuits. Under the proposed settlement
agreement, the notes that are now payable by Coram to Caremark will be canceled
and replaced with a new two-year note in the principal amount of $57.5 million.
Caremark had previously established a reserve for a portion of the $100 million
in securities, and, therefore, the terms of the new notes will not require any
charge against earnings by MedPartners, Inc.
Mr. House considers the settlement important for the futures of both
MedPartners and Integrated Health Services. "This agreement puts behind us one
of the major uncertainties with which Caremark has had to deal. We are now
free to place our focus solely on business as opposed to litigation." He adds,
"We also believe that this settlement better positions IHS as it explains the
proposed merger with Coram to the investment community."
MedPartners, Inc. is the nation's largest physician practice management
company. Corporate headquarters is in Birmingham, Alabama. The Company
develops, consolidates and manages healthcare
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delivery systems. Through the company's network of affiliated group and IPA
physicians, MedPartners provides primary and specialty healthcare services to
prepaid managed care enrollees and fee-for-service patients. The company
operates physician practices in 25 states. Its prescription benefit management
division provides services to more than 15 million people in all 50 states.
MedPartners, Inc.'s affiliation with 7,400 physicians includes 2,470 in group
practices, 4,190 through IPA relationships and 740 hospital-based physicians.
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