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 March 17, 1998
(Date of earliest event reported)
HOSPITAL STAFFING SERVICES, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 1-11131 59-215063
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number)
6245 North Federal Highway, Suite 500
Fort Lauderdale, Florida 33308-1900
(Address of principal executive offices)
(954) 771-0500
Registrant's telephone number, including area code
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HOSPITAL STAFFING SERVICES, INC. AND SUBSIDIARIES
FORM 8-K
ITEM 6. Resignations of Directors
The following represents the Press Release describing the recent events of the
Company and the resignations of certain Board members. Also attached as an
exhibit is a copy of the Board resolution which documents such resignations.
PRESS RELEASE ISSUED March 18, 1998:
HOSPITAL STAFFING SERVICES FILES FOR PROTECTION
UNDER CHAPTER 11 OF THE U.S. BANKRUPTCY CODE
Company Also Reports Changes to its Board of Directors and Senior ManagementTeam
Fort Lauderdale, Florida, March 18, 1998 -- Hospital Staffing Services,
Inc. (NYSE: HSS) reported that it has filed a voluntary petition seeking
protection under Chapter 11 of the U.S. Bankruptcy Code. The Company cited
critical cash shortfalls it has experienced since implementation of a payment
recoupment by the Medicare program for alleged overpayments relating to its home
care operations, from cash payments otherwise due to its home care providers.
The Company's current lender, Capital Healthcare Financing, has agreed to
provide it with Debtor In Possession (DIP) financing through a secured revolving
credit facility that will allow Hospital Staffing Services to maintain its
day-to-day operations. The Company also reported that an investor group, led by
Ronald Lusk, a Dallas, Texas-based private investor, has agreed to provide
financing on an as-needed basis to provide additional financial support for the
Company's day-to-day operations.
The Company also reported that Ronald A. Cass, William F. McConnell, Hector
Luis Ziperovich, M.D., and Robert B. Fields voluntarily resigned as members of
the Board. Concurrently, Ronald Lusk, Robert L. Woodson, III, Joe Williams, Jr.,
and Bobby Shields were named to serve as new members of the Board. Mr. Lusk was
subsequently named by the Board to serve as its new Chairman, replacing Lawrence
Cappel, Ph.D., who remains a Director.
The Company's Board of Directors also announced that it accepted the
resignation of Mr. Ronald G. Huneycutt, its Vice President Finance and
Chief Financial Officer. Subsequently, it named Mr. Lusk to serve as the
Company's new President, Mr. Bobby Shields to serve as its new Chief
Executive Officer and interim Chief Financial Officer, and Mr. Joe Williams
as its new Chief Operating Officer. Mr. Shields previously served as the
Company's Vice President, Administration, Corporate Counsel and Chief
Administrative Officer.
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Commenting further, Mr. Lusk stated, "It is important to note that the
protective bankruptcy filing and changes to the composition of the Company's
Board of Directors and senior management team were accomplished with the
acknowledgment and support of certain shareholders of the Company and the
Company's current lender. These parties have expressed their confidence in our
new management team's ability to effect the successful reorganization and
turnaround of the Company. Our initial efforts will be directed at developing a
plan of reorganization that will allow the Company to maintain its current base
of operations and then ultimately move forward once again in the healthcare
industry."
Mr. Ronald Lusk, has an extensive career in the healthcare industry, and
presently is the owner of several nursing homes located primarily in Florida and
Oklahoma. Mr. Lusk also has interests in various ancillary healthcare companies,
including Dallas, Texas-based Trinity Rehab, Inc., which provides
fee-for-service physical, occupational and speech therapy services; Conservative
Care, Inc., based in Arlington, Texas, which is a nurse practitioner consulting
company that provides various services to the long term care industry; and
Oklahoma City-based Great Plains Medical & Scientific Co., Inc., a provider of
medical equipment and support services to a wide range of healthcare providers.
Mr. Joe Williams was formerly Chief Operating Officer for Knoxville,
Tennessee-based HFI Management, Inc., a home care management organization. He
has extensive experience in the home care industry, having also served as Vice
President and COO for Advance Healthcare, Inc., a durable medical equipment
company which he helped to expand into a full service home health organization,
and was also the Chief Executive Officer of Med 2000, Inc., a physician practice
and home health management company of which he was the owner and founder.
Mr. Robert L. Woodson, III, is the former President of HFI Management, Inc.
While President of that company, it grew from 3 contracts to over 65 contracts
in five years, with a client base of over 2,000,000 annual visits. Mr. Woodson
is also a director of First National Bank in LaFollette, Tennessee, and a member
of the Campbell County Industrial Development Board.
The Company also noted that on March 9, 1998, it completed the sale of its
Travel Nurse subsidiary to Miami, Florida-based Preferred Employers Acquisition
Corp., a subsidiary of Preferred Employers Holdings, Inc. (Nasdaq:PEGI) for cash
in the amount of $5 million, of which $1.5 was advanced in January 1998, with
the balance of $3.5 million delivered on March 6, 1998, and subsequently,
approximately $1.8 million was deposited in an escrow to satisfy certain accrued
liabilities associated with the Travel Nurse business. All cash proceeds
received from the sale were utilized by Hospital Staffing to reduce borrowings
under the Company's bank line of credit.
Hospital Staffing Services, Inc., is a professional health care services
organization that specializes in the provision of nursing services to patients
at home and in health care institutions through a regional network of home
health care offices; rehabilitative services; and support services to an array
of health care providers.
This press release contains forward looking statements which involve numerous
risks and uncertainties. Actual determinations, results and transactions could
differ materially from those contemplated and/or anticipated in such forward
looking statements as a result of certain factors, including those set forth in
the Company's filings with the Securities and Exchange Commission.
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HOSPITAL STAFFING SERVICES, INC. AND SUBSIDIARIES
SIGNATURES
March 26, 1998
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.
HOSPITAL STAFFING SERVICES, INC.
By: /s/Bobby Shields Bobby Shields, Chief Executive Officer
interim Chief Financial Officer
(principal financial officer)
Date: March 26, 1998
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EXHIBIT I
RESOLUTION OF
THE BOARD OF DIRECTORS OF
HOSPITAL STAFFING SERVICES, INC.
At a telephonic meeting of the Board of Directors of Hospital Staffing
Services, Inc. (the "Corporation"), held on March 17, 1998, the Board enacted
the following resolution:
WHEREAS, in an earlier resolution enacted by the Board on March 12,
1998, the Corporation authorized the filing of a voluntary petition under
Chapter 11 of Title 11 of the United States Code; and
WHEREAS, in accordance with the terms of the attached letter dated
March 16, 1998 (a copy of which is attached hereto) (the "Capital Commitment")
Capital Healthcare Financing ("Capital") has offered to provide
debtor-in-possession financing for the Corporation, so long as such bankruptcy
filing involves the participation of Mr. Ron Lusk; and
WHEREAS, Mr. Lusk has agreed to provide debtor-in-possession financing,
as and when needed by the Corporation during the pendency of the Bankruptcy Case
beyond that to be provided by Capital, such financing to include up to $500,000
to be advanced on or before March 20, 1998 (the "Lusk Commitment"); and
WHEREAS, in light of the lack of other viable opportunities available
to the Corporation to provide funding to the Corporation during the pendency of
such bankruptcy, the Board deems it advisable and in the best interest of
shareholders to accept the offers of the provision of debtor-in-possession
financing from Capital and Mr. Lusk; and
WHEREAS, as a condition to Mr. Lusk's obligation to provide debtor-in-
possession financing, Mr. Lusk has requested (a) the resignations of Mr. Cass,
Mr. McConnell, and Mr. Ziperovich from the Board of Directors of the
Corporation and (b) that Ron Lusk, Bobby Shields, Joseph Williams and Robert
Woodson be appointed to the Corporations Board of Directors; and
WHEREAS, as a further condition precedent, by signing below I tender my
resignation as a member of the Corporation's Board of Directors.
NOW, THEREFORE, BE IT RESOLVED, that the Corporation hereby accepts the
offer of the provision of debtor-in-possession financing by Capital; and be it
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2
FURTHER RESOLVED, that the Corporation hereby accepts the offer
of Mr. Ron Lusk to provide debtor-in-possession financing; and be it
FURTHER RESOLVED, that Ron Lusk, Bobby Shields, Joseph Williams and
Robert Woodson are hereby appointed to the Corporation's Board of Directors; and
be it
Dated this 17th day of March, 1998, p.m.
/s/ Lawrence A. Cappel
Lawrence A. Cappel
/s/ Ronald A. Cass
Ronald A. Cass
/s/ William F. McConnell
William F. McConnell
/s/ Hector L. Ziperovich, M.D.
Hector L. Ziperovich, M.D.
The undersigned hereby tenders his resignation from the Board of
Directors of Hospital Staffing Services, Inc.
/s/ Ronald A. Cass
Ronald A. Cass
/s/ William F. McConnell
William F. McConnell
/s/ Hector L. Ziperovich, M.D.
Hector L. Ziperovich, M.D.
Date: March 17, 1998
