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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 AND EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): January 9, 1998
MEDPARTNERS, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-27276 63-1151076
(Commission File No.) (I.R.S. Employer Identification No.)
3000 Galleria Tower
Suite 1000
Birmingham, Alabama 35244
(Address of Principal Executive Offices)
(205) 733-8996
(Registrant's Telephone Number, Including Area Code)
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Item 5. Other Events
On January 7, 1998, MedPartners, Inc. ("MedPartners") issued a press
release announcing the termination of its proposed merger with PhyCor, Inc. On
that date MedPartners also issued a second press release announcing certain
fourth quarter 1997 charges and earnings estimates. On January 8, 1998, there
was a decline in the market prices for MedPartners' publicly traded securities.
Since then, certain persons claiming to be stockholders of MedPartners have
filed complaints in either state or federal court against MedPartners and
certain officers and directors of MedPartners. In these lawsuits, the
plaintiffs purport to represent a class of purchasers of common stock of
MedPartners and generally allege violations of the Securities Exchange Act of
1934, fraud and/or various state law claims in connection with the public
disclosure by MedPartners of the termination of the PhyCor merger and the
fourth quarter 1997 charges and earnings estimates. These complaints seek
certification of a class, damages and interest, as well as costs and expenses.
As of January 22, 1998, MedPartners is aware of six such lawsuits.
Attached as Exhibit 99.1 is a schedule of such suits.
Additionally, on January 16, 1998 a lawsuit, styled Schacter v.
MedPartners, Inc. No. CV-9800297, was filed in the Circuit Court of Jefferson
County, Alabama, against MedPartners and certain of its officers and directors,
purportedly on behalf of all persons who purchased MedPartners' Threshold
Appreciation Price SecuritiesSM in the offering occurring on or about September
16, 1997. This complaint asserts claims under Sections 11 and 15 of the
Securities Act of 1933, as well as Sections 8-6-17(a)(2) and 8-6-19 of the
Alabama Securities Act.
MedPartners' management believes that it and MedPartners have acted
properly throughout and intend to defend each of these cases vigorously. All of
these cases are in the most preliminary stages, and their ultimate resolution
cannot be known at this time. Therefore, there can be no assurance that the
ultimate resolution of these matters will not have a material adverse effect on
the operating results and financial condition of MedPartners.
On January 16, 1998, MedPartners issued a press release announcing the
resignation of Larry R. House as Chairman and Chief Executive Officers and the
appointment of Richard M. Scrushy as Chairman and Acting Chief Executive
Officer of MedPartners. Mr. Scrushy will continue in his role as Chairman and
Chief Executive Officer of HEALTHSOUTH Corporation. Michael D. Martin,
Executive Vice President and Chief Financial Officer of HEALTHSOUTH
Corporation, will replace Mr. House on MedPartners' Board of Directors.
MedPartners has also formed an Executive Committee of the Board of Directors
consisting of Mr. Scrushy as Chair, Roger L. Headrick, Dr. Rosalio J. Lopez,
John S. McDonald, and Charles W. Newhall III. The Executive Committee is to
conduct a search for a full-time Chief Executive Officer. A copy of the press
release is attached hereto as Exhibit 99.2 and is incorporated herein by
reference.
Statements in this document that are not historical facts are hereby
identified as "forward looking statements" for the purpose of the safe harbor
provided by Section 21E of the Securities Exchange Act of 1934 and Section 27A
of the Securities Act of 1933. The Company cautions that such "forward looking
statements", wherever they occur in this document or in other statements
attributable to the Company are necessarily estimates reflecting the best
judgment of the Company's senior management and involve a number of risks and
uncertainties that could cause actual results to differ materially from those
suggested by the "forward looking statements". Such
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"forward looking statements" should, therefore, be considered in light of
various important factors set forth from time to time in the Company's reports
and registration statements filed with the SEC.
The Company disclaims any intent or obligation to update "forward
looking statements".
Item 7. Financial Statements and Exhibits
(c) Exhibits:
99.1 Schedule Listing Various Lawsuits
99.2 Press Release of MedPartners, Inc. dated January 16, 1998.
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, thereunto duly authorized.
MEDPARTNERS, INC.
By /s/ Harold O. Knight, Jr.
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Harold O. Knight, Jr.
Executive Vice President and
Chief Financial Officer
Dated: January 26, 1998
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EXHIBIT 99.1
(1) Lauriello v. MedPartners, Inc., No. CV 98-98 (Cir. Ct. of Jefferson
County, Ala., filed January 9, 1998);
(2) Rubino v. MedPartners, Inc., No. CV-98-B-0067-S (N.D. Ala., filed
January 13, 1998);
(3) Loomis v. MedPartners, Inc., No. CV-98-P-0086-S (N.D. Ala., filed
January 14, 1998);
(4) Marsh v. MedPartners, Inc., No. CV-98-TMP-0096-S (N.D. Ala., filed
January 15, 1998);
(5) Smith v. House, No. CV-98-B-0095-S (N.D. Ala., filed January 15,
1998); and
(6) Buettler v. MedPartners, Inc., No. CV-98-AR-0119-S (N.D. Ala., filed
January 20, 1997).
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[MEDPARTNERS(TM) LETTERHEAD]
FOR IMMEDIATE RELEASE
JANUARY 16, 1998
RICHARD M. SCRUSHY TO BECOME CHAIRMAN AND ACTING CHIEF
EXECUTIVE OFFICER OF MEDPARTNERS: WILL REMAIN CHAIRMAN
AND CHIEF EXECUTIVE OFFICER OF HEALTHSOUTH
BIRMINGHAM, Ala. January 16, 1998 -- MedPartners, Inc. announced today the
resignation of Larry R. House as Chairman and Chief Executive Officer and the
appointment of Richard M. Scrushy as Chairman and Acting Chief Executive Officer
of MedPartners. Mr. Scrushy will continue in his role as Chairman and Chief
Executive Officer of HEALTHSOUTH Corporation. Mark L. Wagar will continue to
serve as President and Chief Operating Officer of MedPartners. Michael D.
Martin, Executive Vice President and Chief Financial Officer of HEALTHSOUTH
Corporation, will replace Mr. House on MedPartners' Board of Directors.
MedPartners has also formed an Executive Committee of the Board of Directors.
This Committee will be chaired by Mr. Scrushy, and will also consist of Roger L.
Headrick, Dr. Rosalio J. Lopez, John S. McDonald, and Charles W. Newhall III.
MedPartners' Executive committed will conduct an intensive search for a
full-time Chief Executive Officer.
Richard M. Scrushy stated, "First and foremost, I will be continuing in all my
current roles and responsibilities with HEALTHSOUTH. I could only undertake
this assignment knowing that HEALTHSOUTH has a deep pool of talented executives,
is in solid financial position, is producing consistent financial results, and
is successfully executing its strategic plan. HEALTHSOUTH continues to be my
primary focus, and as soon as a permanent Chief Executive Officer is appointed,
I will relinquish all management roles at MedPartners."
Mr. Scrushy added, "Larry has done a great job in building MedPartners into a
large and dynamic enterprise, which is positioned to move on to the next phase
of its development. The Board and I wish Larry the best of luck in his future
endeavors. MedPartners has been and is continuing to go through dramatic
change. My goal is to help the organization focus internally on integrating its
operations, and focusing its resources on producing consistent, high quality
operating performance. I will be looking to MedPartners' physician leaders to
assit me in improving the Company, and will seek to strengthen the management of
the Company from both inside and outside the organization."
Larry R. House commented, "The time is right for me to step aside. After
focusing on rapid growth since our inception in 1993, I believe that MedPartners
should focus internally on operations. I have known and worked with Richard
Scrushy for over 25 years, and I believe that he is the right person to lead
this Company until a permanent Chief Executive Officer is found. I will
continue to assist the Company in any way that I can."
-more-
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[MEDPARTNERS(TM) LETTERHEAD]
Statements contained in this press release which are not historical facts are
forward-looking statements. In addition, MedPartners and HEALTHSOUTH, through
their senior management, may make from time to time forward-looking public
statements concerning the matters described herein. Such forward-looking
statements are necessarily estimates reflecting the best judgment of
MedPartners and HEALTHSOUTH's senior management based upon current information
and involve a number of risks and uncertainties. Certain factors which could
affect the accuracy of such forward-looking statements are identified in the
public filings made by MedPartners and HEALTHSOUTH with the Securities and
Exchange Commission, and forward-looking statements contained in this press
release or in other public statements of MedPartners and HEALTHSOUTH or their
senior management should be considered in light of those factors. There can be
no assurance that such factors or other factors will not affect the accuracy of
such forward-looking statements.
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FOR MORE INFORMATION, CONTACT RANDY PITTMAN, VICE PRESIDENT-FINANCE AT
205-733-8996
