SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
TO
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 27, 1997
Commission file number 1-12055
PARACELSUS HEALTHCARE CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
California 95-3565943
<S> <C>
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
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515 W. Greens Road, Suite 800, Houston, Texas
(Address of principal executive offices)
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<S> <C>
77067 (281) 774-5100
(Zip Code) (Registrant's telephone number, including
area code)
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Paracelsus Healthcare Corporation (the "Company") is filing this amendment to
its Current Report on the Form 8-K dated June 27, 1997, to amend Item 7 to said
Current Report.
ITEM 7. EXHIBITS
17 Letter re director resignation of Mr. James A. Conroy.
99 Letter from Mr. Charles R. Miller to Mr. James A. Conroy re Mr. Conroy's
resignation.
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SIGNATURE
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 thereunto duly authorized.
Paracelsus Healthcare Corporation
(Registrant)
Dated: July 8, 1997 By: ___________________________
James G. VanDevender
Senior Executive Vice President,
Chief Financial Officer
& Director
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OLYMPUS PARTNERS
Metro Center, One Station Place
Stanford, Connecticut 06902
(203)353-5900
James A. Conroy
Partner
June 27, 1997
Via Facsimile: 281-774-5110
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The Board of Directors
Paracelsus Healthcare Corporation
515 West Greens Road
Houston, Texas 77067
Attention: Mr. Charles R. Miller
Gentlemen:
I hereby resign as a director of Paracelsus effective immediately. My
resignation is due to my unhappiness with the unwillingness of the Special
Committee to address the issue of the old Paracelsus board members'
responsibility for the reporting and accounting failures found by the Special
Committee, as well as my strong disagreement with the decision made by the
other board members not to make full disclosure of the results of the Special
Committee's investigation to the Securities and Exchange Commission.
I request that this letter be filed in a Form 8-K within the required time
period.
Sincerely,
/s/ James A. Conroy
JAC/jbp
cc: Arthur F. Mathews, Esq.
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PARACELSUS HEALTHCARE CORPORATION
515 W. Greens Road, Suite 800
Houston, Texas 77067
July 7, 1997
Mr. James A. Conroy
Olympus Private Placement Fund
Metro Center, One Station Place
Stamford, CT 06902
Dear Jim:
On behalf of the Board, let me express my regret at your decision to
resign as a director. Unfortunately, your resignation letter creates
several misleading impressions.
FIRST, as you know, the Special Committee's investigation sought to
uncover all facts relevant to the responsibility of the directors of
premerger Paracelsus for the reporting and accounting failures reflected
in the Company's restatement of its financial statements. Based on
these facts, a majority of the Committee, including a completely
disinterested nonmanagement director, concluded over your objection that
it was not in the Company's best interests to make recommendations
concerning those directors at that time. The Company's Special Counsel,
Wilmer, Cutler & Pickering, fully concurred in that judgment. When you
recently raised the same issue again, the only other remaining member of
the Committee, maintained his original position. Once again, Wilmer,
Cutler & Pickering strongly concurred.
SECOND, as you will recall, your motion at the last Board Meeting was
that the Company should waive its attorney-client and work product
privileges so as to permit disclosure of the detailed facts uncovered in
the Special Committee's investigation to the SEC. During the discussion
of your motion, Wilmer, Cutler & Pickering expressed the strongly held
view that, given the pendency of the shareholder and derivative
litigation and other factors, waiver of the privileges was not in the
best interests of the Company. Wilmer, Cutler & Pickering further
reassured the Board that, in its considered view based on the facts
available to it, all legally required public disclosures concerning the
results of the Special Committee's investigation have already been made.
Based on this advice, there was no second to your motion.
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FINALLY, the Board is concerned that the positions you have recently
taken may reflect your particular interests as a member of a large group
of former Champion shareholders, rather than the interests of the
Company, its shareholders, and all of its other constituent groups.
Your difficulty in distinguishing these potentially conflicting
interests is understandable, but unfortunate.
The Company will, of course, comply with your request to file your
resignation letter with the SEC on a Form 8-K within the required time.
As permitted by SEC rules, the Company will also file a copy of this
response.
Sincerely,
/S/ Charles R. Miller
Charles R. Miller
President
