<PAGE>
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 (Date of earliest event reported): January 12, 2001
PENNSYLVANIA PHYSICIAN HEALTHCARE PLAN, INC.
(Exact Name of Registrant as Specified in Charter)
Pennsylvania 23-2795795
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation) Identification No.)
Commission File No.: 0-28390
c/o Suite 3200, 1650 Market Street, Philadelphia, PA 19103
(Address of Principal Executive Offices)
c/o (215) 665-1540
(Registrant's Telephone Number, Including Area Code)
<PAGE>
Item 5. Other Events.
As discussed in Item 2. "Management's Discussion and Analysis or Plan
of Operation," in the Form 10-QSB for the fiscal quarter ended June 30, 1999,
and in the Current Reports on Form 8-K dated October 13, 1999 and October 24,
1999, of Pennsylvania Physician Healthcare Plan, Inc. (the "Company"),
incorporated herein by reference, during the second quarter of 1999 Physicians
Care PPO, Inc., the Company's preferred provider organization, which is its sole
revenue generating subsidiary (the "PPO"), incurred significantly larger
underwriting losses than anticipated. These losses continued in the third
quarter of 1999. As a result of these losses, the PPO's external cash
requirements materially exceeded its internally generated cash by an amount in
excess of its ability to borrow or to access the capital markets. The Company
was unable to enter into any definitive arrangements to provide the PPO with the
additional capital it needed to fund its internal cash requirements.
Consequently, the PPO's net worth declined below that required by Pennsylvania
managed care laws.
On October 13, 1999, the Company met with the Pennsylvania Department
of Insurance (the "Department") so that satisfactory arrangements could be made
to achieve a timely and orderly cessation of the PPO's business, including the
placing of subscribers with other insurance providers. Although the Department
had the authority to seek a rehabilitator to manage the PPO's day-to-day
operations, it then advised the Company that it had until October 25, 1999 to
continue to remain in control in order to wind up the PPO's affairs and also to
seek additional sources of funding. The Department indicated that after that
date it would assess the PPO's financial condition, and, if no additional
sources of funding were obtained, the Department would seek an order from the
Commonwealth Court of Pennsylvania (the "Court") appointing a liquidator for the
PPO.
The Company was attempting to obtain additional capital from the
Pennsylvania Medical Society ("PMS") by the October 25, 1999 deadline set by the
Department. However, the Company and PMS were unable to come to a definitive
arrangement regarding the provision of additional capital.
Consequently, on October 24, 1999 the PPO and the Department entered
into a Consent Order pursuant to which the PPO consented to the entry of an
order of liquidation from the Court which placed the PPO under the control of
the Department and, among other things, revoked the PPO's license, appointed a
rehabilitator and/or liquidator for the PPO, discharged the PPO's employees,
officers and directors, enjoined the PPO from transacting any further business
and ordered that the PPO be dissolved. The Court issued an Order of Liquidation
on October 26, 1999, ordering the liquidation and dissolution of the PPO
effective as of November 1, 1999.
Following the Court's Order of Liquidation, the Department assumed
complete control of the Company's PPO, including the payment of its creditors
and liquidation proceedings. Under Pennsylvania law, the Department had
jurisdiction over the PPO, but not the Company. The Company had no reporting
requirements or responsibilities to the Department after November 1, 1999.
<PAGE>
Also on October 24, 1999, the Company's health maintenance
organization, a subsidiary of the Company which had not yet commenced operations
(the "HMO"), agreed to return its license to the Department.
The Company entered into an arrangement with certain of the Blue
Cross/Blue Shield plans doing business in the PPO's service area whereby these
plans agreed to offer coverage without medical underwriting to all of the PPO's
members effective November 1, 1999.
The Company had considered the possibility of selling its service
company subsidiary, but was unable to find a buyer for this entity.
On January 28, 2000, the Company held a special meeting of shareholders
at which time the Company's Plan of Complete Dissolution was approved and
adopted by the Company's shareholders. A copy of the Plan of Complete
Dissolution was included in the Company's Proxy Statement on Schedule 14A filed
with the Commission on December 20, 1999. All remaining employees of the Company
were terminated as of January 31, 2000. Thereafter, the Company ceased
conducting operations and had no business activities.
As of the date of this Current Report on Form 8-K, the Company's known
creditors have accepted negotiated payments in satisfaction of their claims and
the Company has been liquidated. As a result, all of the Company's stock is
cancelled. No remaining funds are available for distribution to shareholders of
the Company from the proceeds of the liquidation. The Company did not, nor does
it expect to, seek protection from its creditors under the bankruptcy laws.
Under Pennsylvania law, the Company must obtain tax clearance
certificates from the Pennsylvania Department of Labor and Industry and the
Pennsylvania Department of Revenue, prior to filing its Articles of Dissolution.
In December 2000, the Company filed applications with the foregoing departments,
requesting issuance of these tax clearance certificates. Upon receipt of the tax
clearance certificates, the Company will file Articles of Dissolution with the
Pennsylvania Department of State. Upon the filing of these Articles of
Dissolution, the Company will no longer exist.
As of January 11, 2001, the Company incurred an aggregate of $38,600 of
liquidation payments and expenses, as listed below:
3
<PAGE>
Listing of Liquidation Payments and Expenses
Item Estimated Amount
---- ----------------
-------------------------------------------------------------------------------
Bank Charges $ 500.00
-------------------------------------------------------------------------------
Phone Answering Service 1,200.00
-------------------------------------------------------------------------------
Record Storage for 7 Years 4,200.00
-------------------------------------------------------------------------------
Edgar SEC Filing 500.00
-------------------------------------------------------------------------------
Communications to Shareholders 6,000.00
-------------------------------------------------------------------------------
Completion of all Tax Return Filings 6,000.00
-------------------------------------------------------------------------------
Legal 10,000.00
-------------------------------------------------------------------------------
Potential Tax Return Settlements 6,000.00
-------------------------------------------------------------------------------
Liquidation Expense Reimbursement 1,200.00
-------------------------------------------------------------------------------
Termination of 401K Plan and Related Filings 3,000.00
-------------------------------------------------------------------------------
Contemporaneous with the filing of this Current Report on Form 8-K, the
Company will file a Form 15 with the United States Securities and Exchange
Commission to terminate the Company's reporting obligations.
4
<PAGE>
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.
Pennsylvania Physician Healthcare Plan, Inc.
(Registrant)
Date: January 12, 2001 By: /s/ Gary Brown
-----------------------------------
Gary Brown, Chairman of
the Board
5
