SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 2)
Under the Securities Exchange Act of 1934
THE HILLHAVEN CORPORATION
(Name of Issuer)
Common Stock, par value $.75 per share
(Title of Class of Securities)
431576 10 7
(CUSIP Number of Class of Securities)
Scott M. Brown, Esq.
National Medical Enterprises, Inc.
2700 Colorado Avenue
Santa Monica, California 90404
(310) 998-8000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
with a copy to:
Brian J. McCarthy, Esq.
Skadden, Arps, Slate, Meagher & Flom
300 S. Grand Avenue
Los Angeles, California 90071
(213) 687-5070
December 19, 1994
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Statement because of Rule 13d-1(b)(3) or (4), check the
following: ( )
Check the following box if a fee is being paid with this
Statement: ( )
CUSIP No. 413576 10 7
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
NATIONAL MEDICAL ENTERPRISES, INC. 95-2557091
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) (X )
(3) SEC USE ONLY
(4) SOURCE OF FUNDS*
00
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) (X )
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Nevada
: (7) SOLE VOTING POWER
:
: 8,878,147
:
NUMBER OF SHARES BENEFICIALLY : (8) SHARED VOTING
OWNED BY EACH REPORTING :
0
PERSON WITH :
: (9) SOLE DISPOSITIVE
:
8,878,147
:
:(10) SHARED DISPOSITIVE
:
0
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,878,147
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES* ( )
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
31%
(14) TYPE OF REPORTING PERSON*
CO
CUSIP No. 413576 10 7
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
NME PROPERTIES CORP. 62-0725891
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) (X )
(3) SEC USE ONLY
(4) SOURCE OF FUNDS*
00
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Tennessee
: (7) SOLE VOTING POWER
:
: 8,878,147
:
NUMBER OF SHARES BENEFICIALLY : (8) SHARED VOTING
OWNED BY EACH REPORTING :
0
PERSON WITH :
: (9) SOLE DISPOSITIVE
:
8,878,147
:
:(10) SHARED DISPOSITIVE
:
0
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,878,147
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES* ( )
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
31%
(14) TYPE OF REPORTING PERSON*
CO
CUSIP No. 413576 10 7
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
NME PROPERTY HOLDING CO., INC. 91-1172506
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) (X )
(3) SEC USE ONLY
(4) SOURCE OF FUNDS*
00
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
: (7) SOLE VOTING POWER
:
: 2,877,947
:
NUMBER OF SHARES BENEFICIALLY : (8) SHARED VOTING
OWNED BY EACH REPORTING :
0
PERSON WITH :
: (9) SOLE DISPOSITIVE
:
2,877,947
:
:(10) SHARED DISPOSITIVE
:
0
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,877,947
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES* ( )
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
10.1%
(14) TYPE OF REPORTING PERSON*
CO
CUSIP No. 413576 10 7
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
NME PROPERTIES, INC. 91-0628039
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) (X )
(3) SEC USE ONLY
(4) SOURCE OF FUNDS*
00
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
: (7) SOLE VOTING POWER
:
: 2,877,947
:
NUMBER OF SHARES BENEFICIALLY : (8) SHARED VOTING
OWNED BY EACH REPORTING :
0
PERSON WITH :
: (9) SOLE DISPOSITIVE
:
2,877,947
:
:(10) SHARED DISPOSITIVE
:
0
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,877,947
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES* ( )
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
10.1%
(14) TYPE OF REPORTING PERSON*
CO
This Amendment No. 2 (the "Amendment No. 2")
amends and supplements the Statement on Schedule 13D (the
"Schedule 13D"), dated January 31, 1990, and Amendment
No. 1 of Schedule 13D, dated February 28, 1994, relating
to the common stock, par value $.75 per share (the
"Common Stock"), issued by The Hillhaven Corporation, a
Nevada corporation (the "Company"), and is being filed
pursuant to Rule 13d-2 under the Securities Exchange Act
of 1934, as amended (the "Act").
Unless otherwise indicated, each capitalized
term used but not otherwise defined herein shall have the
meaning assigned to such term in the Schedule 13D. The
information set forth in the Exhibits attached hereto is
hereby expressly incorporated herein by reference and the
response to each item of this statement is qualified in
its entirety by the provisions of such Exhibits.
ITEM 2. IDENTITY AND BACKGROUND
Item 2 is amended and supplemented as follows:
This Schedule 13D is being filed by National
Medical Enterprises, Inc., a Nevada corporation ("NME");
NME Properties Corp., a Tennessee corporation
("PropCorp"), formerly known as The Hillhaven
Corporation; NME Property Holding Co., Inc., a Delaware
corporation ("Holding"), formerly known as HH Holding
Co., Inc.; and NME Properties, Inc., a Delaware
corporation ("PropInc"), formerly known as Hillhaven,
Inc. (collectively, the "Reporting Persons").
The principal business of NME is the operation
of domestic and international general hospitals. The
principal business of PropCorp is its investments in the
healthcare industry. NME owns all of the outstanding
stock of PropCorp. The principal business of Holding is
its investments in the healthcare industry. PropCorp
owns all of the outstanding stock of Holding. The
principal business of PropInc is its investments in the
healthcare industry. PropCorp and Holding own all of the
outstanding stock of PropInc.
The address of the principal business and the
principal office of each of NME, PropCorp, Holding and
PropInc is 2700 Colorado Avenue, Santa Monica, California
90404.
The name, business address, citizenship,
present principal occupation or employment, and the name,
principal business and address of any corporation or
other organization in which each such employment is
conducted, of each executive officer and director of NME,
PropCorp, Holding and PropInc are set forth on Schedules
A, B, C and D, respectively, attached hereto.
Except as set forth in the following two
paragraphs, during the past five (5) years none of the
Reporting Persons nor any other person or entity
controlling any of such persons, nor, to the best of any
of their knowledge, any of the other persons listed on
Schedules A, B, C and D attached hereto, has been (i)
convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) a party to a
civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or
mandating activities subject to United States federal or
state securities laws or finding any violation with
respect to such laws.
NME has been involved in certain significant
legal proceedings and investigations related principally
to its discontinued psychiatric business. These
proceedings and investigations include investigation by
various state and Federal agencies. As a result of
negotiations between NME and the Civil and Criminal
Divisions of the Department of Justice ("DOJ") and the
Department of Health and Human Services ("HHS"),
subsidiaries of NME entered into various agreements on
June 29, 1994, which brought to a close all open
healthcare investigations of NME, its subsidiaries and
its facilities by the Federal government and its
agencies. As a result of those agreements, on July 12,
1994 the United States District Court for the District
of Columbia accepted a plea by a subsidiary operating
NME's psychiatric hospitals for violations relating to
the payment of remuneration to induce referrals and a
conspiracy to make such payments. In addition, NME
agreed to pay $362.7 million to the Federal government.
The court also accepted a plea agreement relating to a
single general hospital and activities that occurred
while an individual convicted of defrauding the hospital
was its chief executive, pursuant to which another
subsidiary pleaded guilty to making illegal payments
concerning programs receiving Federal funds. On July 12,
1994, NME, without admitting or denying liability,
consented to the entry, by the United States District
Court for the District of Columbia, of a civil injunctive
order in response to a complaint by the Securities and
Exchange Commission. The complaint alleged that NME
failed to comply with anti-fraud and recordkeeping
requirements of the Federal securities laws concerning
the manner in which NME recorded the revenues from the
activities that were the subject of the Federal
government settlement relating to the psychiatric
operations referred to above. In the order, NME is
directed to comply with such requirements of the Federal
securities laws. On October 17, 1994, NME also signed
final agreements with 26 states and the District of
Columbia, representing all of the jurisdictions from
which NME's psychiatric subsidiaries received Medicaid
payments during the time frame at issue in the Federal
investigations. These agreements settle all potential
state claims related to the matters that were the subject
of the Federal investigations.
One component of NME's settlement with Federal
agencies executed in June 1994 is the adoption of a
corporate compliance program under which NME has agreed,
among other things, to: complete the disposition of its
psychiatric division facilities (with the exception of
four campus psychiatric facilities) no later than
November 30, 1995; not own or operate other psychiatric
facilities (defined for the purposes of the agreement to
include residential treatment centers and substance abuse
facilities) for the five years from the date of
completion of the disposition of its psychiatric division
facilities; and divest any psychiatric facilities
acquired incidental to a corporate transaction within 180
days of such acquisition. In addition, NME has agreed to
implement certain oversight procedures pertaining to the
matters that were the subject of the government
investigations and to continue its ethics training
program and ethics telephone hotline. Should the
oversight procedures or hotline reveal, after
investigation by NME, credible evidence of violations of
criminal, or potential material violations of civil,
laws, rules or regulations governing federally funded
programs, NME is required to report any such violation to
the DOJ and HHS.
ITEM 4. PURPOSE OF TRANSACTION
Item 4 is amended and supplemented as follows:
NME has reached a determination to focus its
operations on its general hospital operations and the
development of integrated healthcare delivery systems.
In that regard, NME continually analyzes whether its
assets and investments fit within its strategic plans,
with a view of determining ways in which such investments
might best increase the value of shareholders' investment
in NME. At a meeting held on December 19, 1994, the
Executive Committee of the Board of Directors of NME
determined to review NME's investment in equity
securities of the Company in light of NME's determination
to focus its operations on its general hospital
operations and the development of integrated healthcare
delivery systems. With respect to its investment in the
Company, NME is reviewing its alternatives. NME
currently intends to engage in discussions with the
Company regarding possible means by which all or a
portion of the investment may be sold. Among the
possibilities which may be discussed is a transaction
between NME and the Company in respect of the investment;
the issuance by NME of debt or equity securities that
would be exchangeable or convertible into equity
securities of the Company; and the maintenance of either
some or all of the investment in the Company. There can
be no assurance that the discussions with the Company
will result in any transaction. In addition, NME may
explore other alternatives with respect to its
investment, including the sale of all or a portion of the
investment in a negotiated sale to one or more third
parties or otherwise. In reaching any conclusion as to a
course of action, NME, PropCorp, Holding and PropInc will
take into consideration various factors, such as the
Company's business and prospects, other developments
concerning the Company, NME's determination to focus its
operations on its general hospital operations and the
development of integrated healthcare delivery systems,
other business opportunities available to NME and general
economic, monetary and stock market conditions.
Except as otherwise described in this Item 4,
none of NME, PropCorp, Holding or PropInc has any present
specific plans or proposals that relate to or would
result in any of the following: (i) the acquisition by
any person of additional securities of the Company or the
disposition of securities of the Company, (ii) an
extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the Company or
any of its subsidiaries, (iii) a sale or transfer of a
material amount of assets of the Company or any of its
subsidiaries, (iv) any change in the present Board of
Directors or management of the Company, including any
plans or proposals to change the number or term of
directors or to fill any existing vacancies on the Board
of Directors, (v) any material change in the present
capitalization or dividend policy of the Company, (vi)
any other material change in the Company's business or
corporate structure, (vii) changes in the Company's
Amended and Restated Articles of Incorporation, Bylaws or
other instruments corresponding thereto or other actions
that may impede the acquisition of control of the Company
by any person, (viii) causing a class of securities of
the Company to be delisted from a national securities
exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national
securities association, (ix) a class of equity securities
of the Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934, as amended, or (x) any
action similar to those enumerated above. NME, PropCorp,
Holding or PropInc may at any time, however, propose any
of the foregoing that it considers desirable.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Item 5 is amended and supplemented as follows:
PropInc may be deemed to be the beneficial
owner of the 2,877,947 shares of Common Stock owned by it
(the "PropInc Shares"), or approximately 10.1% of the
shares of Common Stock outstanding. PropInc has the sole
power to vote and the sole power to dispose of the
PropInc Shares.
PropCorp and Holding, as the sole stockholders
of PropInc, may be deemed, for the purposes of Rule 13d-3
under the Act, to beneficially own indirectly the PropInc
Shares.
PropCorp may be deemed to be the beneficial
owner of the 6,000,200 shares of Common Stock owned by it
(the "PropCorp Shares"), or approximately 21% of the
shares of Common Stock outstanding. PropCorp has the
sole power to vote and the sole power to dispose of the
PropCorp Shares. As noted above, PropCorp also may be
deemed, for purposes of Rule 13d-3 under the Act, to
beneficially own indirectly the PropInc Shares, for an
aggregate of 8,878,147 shares of Common Stock, or
approximately 31% of the shares of Common Stock
outstanding.
NME, as the sole stockholder of PropCorp and
Holding, may be deemed, for purposes of Rule 13d-3 under
the Act, to beneficially own indirectly the PropCorp
Shares and the PropInc Shares, for an aggregate of
8,878,147 shares of Common Stock, or approximately 31% of
the shares of Common Stock outstanding.
The Reporting Persons, in the aggregate, may be
deemed to beneficially own 8,878,147 shares of Common
Stock, or approximately 31% of the shares of Common Stock
outstanding. The percentage of shares of Common Stock
outstanding as beneficially owned herein on the date
hereof is based upon 28,623,663 shares of Common Stock
outstanding as of November 30, 1994.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 26 Joint Filing Agreement
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
Date: December 20, 1994
NATIONAL MEDICAL ENTERPRISES, INC.
By: /s/ Scott M. Brown
Scott M. Brown
Senior Vice President and Secretary
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
Date: December 20, 1994
NME PROPERTIES CORP.
By: /s/ Scott M. Brown
Scott M. Brown
Vice President
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
Date: December 20, 1994
NME PROPERTY HOLDING CO., INC.
By: /s/ Scott M. Brown
Scott M. Brown
Vice President
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
Date: December 20, 1994
NME PROPERTIES, INC.
By: /s/ Scott M. Brown
Scott M. Brown
Vice President
SCHEDULE A
Executive Officers and Directors
of
National Medical Enterprises, Inc.
The names of the Directors and the names and titles of
the Executive Officers of National Medical Enterprises, Inc.
("NME") and their business addresses and principal occupations
are set forth below. Unless otherwise indicated, each
individual's business address is that of NME at 2700 Colorado
Avenue, Santa Monica, California 90404, each occupation set forth
opposite an individual's name refers to NME and each individual
is a United States citizen.
Present Principal
Name, Business Address Occupation
________________________________ ___________________________________
Jeffrey C. Barbakow* Chairman of the Board and Chief
Executive Officer
Michael H. Focht, Sr.* President and Chief Operating
Officer
Maris Andersons+ Executive Vice President and
Treasurer
Scott M. Brown Senior Vice President, General
Counsel and Secretary
Raymond L. Mathiasen Senior Vice President and Chief
Financial Officer
Barry P. Schochet Executive Vice President and
President - Hospital Division
Bernice B. Bratter* Executive Director, Senior Health
2125 Arizona and Peer Counseling
Santa Monica, California 90404
Maurice J. DeWald* Chairman and Chief Executive Officer,
19100 Von Karman Avenue, Suite 350 Verity Financial Group, Inc.
Irvine, California 92715
Peter de Wetter*+ Executive Vice President until his
retirement in May 1989
Edward Egbert, M.D.* Physician in private practice until
his retirement in January 1994
Raymond A. Hay* Chairman and Chief Executive Officer,
5956 Sherry Lane, Suite 902 Aberdeen Associates
Dallas, Texas 75225
Lester B. Korn* Chairman and Chief Executive Officer,
1800 Century Park East, Suite 1100 Korn Tuttle Capital Group
Los Angeles, California 90067
James P. Livingston* Private Investor; Executive
Vice President until his retirement
in June 1986
Richard S. Schweiker* President, American Council of
1001 Pennsylvania Avenue, N.W. Life Insurance
Washington, DC 20004
__________________________
* Director of NME
+ Director of The Hillhaven Corporation
SCHEDULE B
Executive Officers and Directors
of
NME Properties Corp.
The names of the Directors and the names and titles of
the Executive Officers of NME Properties Corp., a Tennessee
corporation, and their business addresses and principal
occupations are set forth below. Unless otherwise indicated,
each individual's business address is that of NME Properties
Corp. at 2700 Colorado Avenue, Santa Monica, California 90404,
each occupation set forth opposite an individual's name refers to
NME Properties Corp. and each individual is a United States
citizen.
Present Principal
Name, Business Address Occupation
_______________________________ ___________________________________
Raymond L. Mathiasen President; Senior Vice President and
Chief Financial Officer, NME
Maris Andersons Senior Vice President and Treasurer;
Executive Vice President and
Treasurer, NME
Scott M. Brown* Vice President and Secretary;
Senior Vice President, General Counsel
and Secretary, NME
____________________________
* Director
SCHEDULE C
Executive Officers and Directors
of
NME Property Holding Co., Inc.
The names of the Directors and the names and titles of
the Executive Officers of NME Property Holding Co., Inc.
("Holding") and their business addresses and principal
occupations are set forth below. Unless otherwise indicated,
each individual's business address is that of Holding at 2700
Colorado Avenue, Santa Monica, California 90404, each occupation
set forth opposite an individual's name refers to Holding and
each individual is a United States citizen.
Present Principal
Name, Business Address Occupation
________________________________ ___________________________________
Raymond L. Mathiasen President; Senior Vice President and
Chief Financial Officer, NME
Maris Andersons Senior Vice President and Treasurer;
Executive Vice President and
Treasurer, NME
Scott M. Brown* Vice President and Secretary;
Senior Vice President, General
Counsel and Secretary, NME
_________________________
* Director
SCHEDULE D
Executive Officers and Directors
of
NME Properties, Inc.
The names of the Directors and the names and titles of
the Executive Officers of NME Properties, Inc. and their business
addresses and principal occupations are set forth below. Unless
otherwise indicated, each individual's business address is that
of NME Properties, Inc. at 2700 Colorado Avenue, Santa Monica,
California 90404, each occupation set forth opposite an
individual's name refers to NME Properties, Inc. and each
individual is a United States citizen.
Present Principal
Name, Business Address Occupation
________________________________ ___________________________________
Raymond L. Mathiasen President; Senior Vice President and
Chief Financial Officer, NME
Maris Andersons Senior Vice President and Treasurer;
Executive Vice President and
Treasurer, NME
Scott M. Brown* Vice President and Secretary;
Senior Vice President, General
Counsel and Secretary, NME
________________________
* Director
EXHIBIT INDEX
Exhibit No. Description
Exhibit 26 Joint Filing Agreement
Exhibit 26
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities
Exchange Act of 1934, as amended, each of the persons named
below agrees to the joint filing on behalf of each of them
of a Statement on Schedule 13D (including amendments
thereto) with respect to the common stock, par value $.75
per share, of The Hillhaven Corporation, a Nevada
corporation, and further agrees that this Joint Filing
Agreement be included as an exhibit to such filings provided
that, as contemplated by Section 13d-1(f)(l)(ii), no person
shall be responsible for the completeness or accuracy of the
information concerning the other persons making the filing,
unless such person knows or has reason to believe that such
information is inaccurate. This Joint Filing Agreement may
be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument.
Date: December 20, 1994
NATIONAL MEDICAL NME PROPERTIES CORP.
ENTERPRISES, INC.
By:/s/ Scott M. Brown
By:/s/ Scott M. Brown _________________________
__________________________ Scott M. Brown
Scott M. Brown Vice President
Senior Vice President
and Secretary
NME PROPERTY HOLDING NME PROPERTIES, INC.
CO., INC.
By: /s/ Scott M. Brown
By:/s/ Scott M. Brown __________________________
__________________________ Scott M. Brown
Scott M. Brown Vice President
Vice President
