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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
January 1, 1998
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Date of Report (date of earliest event reported)
IN-HOUSE REHAB CORPORATION
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Exact Name of Registrant as Specified in its Charter
Colorado 0-22155 84-0987697
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State or Other Jurisdiction Commission File IRS Employer Identifi-
of Incorporation Number cation Number
325 West Main Street, Suite 1400B, Louisville, Kentucky 40202
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Address of Principal Executive Offices, Including Zip Code
(502) 568-8923
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Registrant's Telephone Number, Including Area Code
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ITEM 5. OTHER EVENTS
In conjunction with the pending merger between Retirement Care
Associates, Inc. ("Retirement Care") and Sun Healthcare Group, Inc. ("Sun
Healthcare"), effective January 1, 1998, In-House Rehab Corporation (the
"Company") entered into an informal arrangement with Retirement Care, a major
customer of the Company, and Sun Healthcare pursuant to which all of the
Contracts for Therapy Program Services which the Company has with facilities
owned, operated or managed by Retirement Care and its affiliates will be
transferred to a subsidiary of Sun Healthcare Group, Inc. ("Sun Healthcare")
which provides rehabilitation services. The transfer of these contracts will
occur over a transition period beginning in January 1998 and ending in March
1998. As of January 1, 1998, the Company had 22 Contracts for Therapy Program
Services with Retirement Care facilities.
The transfer of the contracts is a result of a merger agreement between
Retirement Care and Sun Healthcare which is expected to be completed in the
next 90 days. For the one month period ending December 31, 1997,
approximately 35% of the Company's revenues was derived from contracts with
Retirement Care facilities. As a result, the Company's revenues will be
substantially reduced following the transition period. The Company intends to
defray a portion of this lost revenue by seeking contracts with additional
facilities which are not affiliated with Retirement Care, and by acquiring
additional rehabilitation companies. However, there can be no assurance that
the Company will be able to acquire such contracts or companies.
IN-HOUSE REHAB CORPORATION
Dated: January 14, 1998 By/s/ Robert J. Babine
Robert J. Babine,
Chief Financial Officer
