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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): November 2, 1999
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VENCOR, INC.
(Exact name of registrant as specified in its charter)
Delaware 001-14057 61-1323993
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation or organization) Identification No.)
One Vencor Place
680 South Fourth Street
Louisville, Kentucky
(Address of principal executive offices)
40202-2412
(Zip Code)
Registrant's telephone number, including area code: (502) 596-7300
Not Applicable
(Former name or former address, if changed since last report.)
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Items 1-3. Not Applicable.
Item 4. Changes in Registrant's Certifying Accountants.
Vencor, Inc. (the "Company"), upon approval of its Board of Directors,
appointed PricewaterhouseCoopers LLP ("PWC") as its independent auditors for the
fiscal year ending December 31, 1999 to replace Ernst & Young LLP ("Ernst &
Young") effective November 2, 1999. The appointment of PWC is subject to
approval by the United States Bankruptcy Court ("Bankruptcy Court"). The Board
of Directors was advised by counsel that the participation of Ernst & Young in
the Company's 1998 spin off from Ventas, Inc. presented a potential conflict of
interest that would significantly jeopardize the ability of Ernst & Young to be
approved as independent auditors for the Company by the Bankruptcy Court. The
audit reports of Ernst & Young on the consolidated financial statements of the
Company and its subsidiaries as of and for the years ended December 31, 1998 and
1997, did not contain any adverse opinion or disclaimer of opinion, nor were
they qualified or modified as to audit scope or accounting principles. The
opinion of Ernst & Young for the period ended December 31, 1998 was modified as
to uncertainty by the inclusion of an explanatory "going concern" paragraph
resulting from the Company's net loss in 1998, working capital deficiency and
covenant defaults on its bank loan agreement.
In connection with the audits for the two years ended December 31,
1998 and 1997, and the subsequent interim period through November 2, 1999, there
were no disagreements with Ernst & Young on any accounting principles or
practices, financial statement disclosures, or auditing scope or procedures,
which if not resolved to the satisfaction of Ernst & Young, would have caused it
to make a reference to the subject matter of the disagreement in their report.
In connection with the audit of the Company's consolidated financial
statements for the year ended December 31, 1998, Ernst & Young informed the
Company and its Audit and Compliance Committee of a condition that it believed
constituted a material weakness in the Company's internal controls. Ernst &
Young communicated that certain of the Company's account reconciliations had not
been completed on a timely basis. Additionally, Ernst & Young stated that there
was a lack of appropriate follow up and resolution of reconciling items,
including adjustments of the accounting records on a timely basis, and there was
a lack of evidence of review of the reconciliations by an independent person.
The Company did reconcile all accounts and recorded the appropriate adjustments
prior to the filing of its Annual Report on Form 10-K for the year ended
December 31, 1998. Ernst & Young advised the Company that, in completing its
audit, it considered the aforementioned material weakness in determining the
nature, timing and extent of procedures performed to enable it to issue its
opinion on the consolidated financial statements. The Company has authorized
Ernst & Young to respond fully to the inquires of PWC concerning these matters.
The Company has requested that Ernst & Young furnish it with a letter
addressed to the Securities and Exchange Commission stating whether or not it
agrees with the statements contained herein. A copy of such letter dated
November 5, 1999 is filed as Exhibit 16 to this Current Report on Form 8-K.
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Items 5-6. Not Applicable.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
Exhibit 16 Letter from Ernst & Young LLP regarding a change in
certifying accountants.
Items 8-9. Not Applicable.
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.
VENCOR, INC.
Dated: November 5, 1999 By: /s/ Richard A. Lechleiter
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Richard A. Lechleiter
Vice President, Finance,
Corporate Controller and
Treasurer
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Exhibit 16
[Letterhead of Ernst & Young LLP appears here]
November 5, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Gentlemen:
We have read Item 4 of the Form 8-K dated November 2, 1999 of Vencor, Inc. and
are in agreement with the statements contained therein.
/s/ Ernst & Young LLP
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