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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 2)*
PARACELSUS HEALTHCARE CORPORATION
(Name of Issuer)
Common Stock, No Stated Value
-----------------------------
(Title of Class of Securities)
15850B
------
(CUSIP Number)
Dr. Heiner Meyer zu Losebeck
Park-Hospital GmbH
Sedanstr. 109
D-49076 Osnabruck
Federal Republic of Germany
011-49-541-669-2110
-------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 2, 1999
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(Date of Event Which Requires Filing of this Statement)
Copy to:
Wilfried E. Witthuhn
King & Spalding
1185 Avenue of the Americas
New York, New York 10036
(212) 556-2100
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box: [ ].
Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 (the "Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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SCHEDULE 13D
CUSIP No. 15850 B
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Park-Hospital GmbH
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Federal Republic of Germany
NUMBER OF 7. SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 19,906,742
EACH 9. SOLE DISPOSITIVE POWER
REPORTING 0
PERSON WITH 10. SHARED DISPOSITIVE POWER
19,906,742
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
19,906,742
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.52%
14. TYPE OF REPORTING PERSON*
CO
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SCHEDULE 13D
CUSIP No. 15850 B
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Paracelsus-Kliniken-Deutschland GmbH
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Federal Republic of Germany
NUMBER OF 7. SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 19,906,742
EACH 9. SOLE DISPOSITIVE POWER
REPORTING 0
PERSON WITH 10. SHARED DISPOSITIVE POWER
19,906,742
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
19,906,742
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.52%
14. TYPE OF REPORTING PERSON*
HC
3
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SCHEDULE 13D
CUSIP No. 15850 B
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Dr. Heiner Meyer zu Losebeck
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Federal Republic of Germany
NUMBER OF 7. SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 19,906,742
EACH 9. SOLE DISPOSITIVE POWER
REPORTING 0
PERSON WITH 10. SHARED DISPOSITIVE POWER
19,906,742
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
19,906,742
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.52%
14. TYPE OF REPORTING PERSON*
OO
4
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SCHEDULE 13D
CUSIP No. 15850 B
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Mr. Peter Frommhold
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Federal Republic of Germany
NUMBER OF 7. SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 19,906,742
EACH 9. SOLE DISPOSITIVE POWER
REPORTING 0
PERSON WITH 10. SHARED DISPOSITIVE POWER
19,906,742
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
19,906,742
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.52%
14. TYPE OF REPORTING PERSON*
OO
5
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Item 5. Interest in Securities of the Issuer.
(a) As of the date hereof, Park, PKD and each Co-executor
(collectively, the "Reporting Persons") are deemed to beneficially own
19,906,742 shares of Common Stock of Paracelsus, representing 34.52% of the
total outstanding shares of Common Stock of Paracelsus.
(b) Park, a wholly-owned subsidiary of PKD, is deemed to be the direct
beneficial owner of the shares. PKD may be deemed to beneficially own the shares
of Common Stock of Paracelsus owned by Park. The Co-executors, as co-executors
of the estate of Professor Krukemeyer, and the managing directors of Park and
PKD, share indirect voting and investment power over the shares of Common Stock
of Paracelsus owned by Park and may be deemed to beneficially own such shares.
The Co-executors, PKD and Park share voting and dispositive power with respect
to all of the shares of Common Stock of Paracelsus owned by Park.
(c) On September 2, 1999, Park, as the majority shareholder in
Paracelsus, transferred an aggregate of 9,865,000 shares of Common Stock of
Paracelsus owned by it to the class members and to certain former shareholders
of Champion Healthcare Corporation (the "Champion Shareholders"), in connection
with the global settlement of the putative class and derivative actions (the
"Shareholder Litigation") arising out of or relating to the merger of Paracelsus
with Champion Healthcare Corporation ("Champion") in August 1996 and two related
public offerings, and pursuant to the terms of: (i) a Settlement Agreement,
dated as of March 24, 1999, by and among the Champion Shareholders, Park, Dr.
Krukemeyer and Paracelsus, (ii) a Stipulation of Settlement, dated May 11, 1999,
by and among plaintiffs, individually and as representatives of the Class, as
defined, Paracelsus, Manfred G. Krukemeyer, R.J. Messenger, James T. Rush,
Charles R. Miller, James G. VanDevender, the Champion Shareholders, Park,
Donaldson Lufkin & Jenrette Securities Corporation, Bear Stearns & Co., Inc.,
Smith Barney, Inc., and ABN AMRO Chicago Corporation in connection with the
litigation captioned IN RE PARACELSUS CORP. SECURITIES LITIGATION, Master File
No. H-96-3464 (EW) filed with the United States District Court for the Southern
District of Texas, and (iii) a Settlement Agreement, dated March 17, 1999, by
and between James G. Caven and Robert Orovitz, derivatively on behalf of
Champion and double derivatively on behalf of Paracelsus; Paracelsus, the
Champion Shareholders, Park; Donaldson Lufkin & Jenrette Securities Corporation,
Bears Stearns & Co., Smith Barney, Inc., and ABN AMRO Chicago Corporation,
Manfred Georg Krukemeyer, Charles R. Miller, James G. VanDevender, Ronald R.
Patterson, R.J. Messenger, James T. Rush, Robert C. Joyner, Michael D. Hofmann,
Christian A. Lange, and Scott K. Barton.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to
Securities of the Issuer
In connection with the settlement of the Shareholder Litigation, Park
and the Company entered into a Shareholder Agreement, dated as of March 19, 1999
(the "1999 Shareholder Agreement"). Upon the effectiveness of the 1999
Shareholder Agreement, the Shareholder Agreement terminated. The principal terms
of the 1999 Shareholder Agreement are as follows:
Board Representation. The 1999 Shareholder Agreement provides that Park
has the right to designate up to three persons for nomination to the Board of
Directors of Paracelsus (the "Paracelsus Board"), one of whom shall be
designated as a Class I director, one of whom shall be designated as a Class II
director and one of whom shall be designated as a Class III director; provided,
however, that if Park, together with its affiliates and associates, shall cease
to own at least: (i) 20% of the total voting
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power of Paracelsus, Park shall only be entitled to designate up to two persons
for nomination to the Paracelsus Board, (ii) 10% of the total voting power of
Paracelsus, Park shall only be entitled to designate up to one person for
nomination to the Paracelsus Board, and (iii) 5% of the total voting power of
Paracelsus, Park shall not be entitled to designate any persons for nomination
to the Paracelsus Board.
Limitations on Transfers of Voting Securities. The 1999 Shareholder
Agreement contains certain transfer restrictions that prohibit Park, for a
period of two years from the date of the 1999 Shareholder Agreement, from
consummating any direct or indirect sale, transfer, assignment, pledge,
hypothecation, mortgage or other disposition, including those by operation or
succession of law, merger or otherwise, or any encumbrance (other than
encumbrances arising by operation of law) (a "Transfer"), or suffering or
permitting any of its affiliates or associates to Transfer, in any single
transaction or group of related transactions, any voting securities of
Paracelsus, except for certain Transfers, as set forth in the 1999 Shareholder
Agreement.
Right of First Offer. The 1999 Shareholder Agreement provides that
Paracelsus will not enter into or recommend any Acquisition Proposal that has
been approved and recommended by a majority of the Paracelsus Board, with at
least one of such majority being an independent director (an "Approved
Acquisition Proposal") without first notifying Park in writing (a "Proposal
Notice") and providing Park (including its affiliates) the opportunity to
consummate an Acquisition Proposal on terms substantially equivalent to and, if
the Approved Acquisition Proposal is a cash offer, at a cash price or, if the
Approved Acquisition Proposal includes non-cash consideration, at a price (in
either case, the "Offer Price") equal to the sum of the amount of any cash plus
the fair market value of any other consideration offered in such prospective
Approved Acquisition Proposal, as the same may be amended or modified from time
to time (a "Shareholder Proposal").
Agreement to Sell Voting Securities. Subject to the rights of Park to
propose, negotiate and consummate a Shareholder Proposal in accordance with the
provisions of the 1999 Shareholder Agreement, Park has agreed that it will, and
will cause any affiliates or associates of Park to, sell in, tender into and
vote in favor of, as the case may be, any Approved Acquisition Proposal and any
Shareholder Proposal approved by the Paracelsus Board in accordance with the
provisions of the 1999 Shareholder Agreement, all voting securities of
Paracelsus beneficially owned by Park or any affiliate or associate of Park. The
foregoing obligation to vote and sell voting securities of Paracelsus will not
be binding upon any permitted transferees of Park so long as, if Park continues
to be subject to the 1999 Shareholder Agreement, such permitted transferee is
not an affiliate or associate of Park.
Registration Rights. The 1999 Shareholder Agreement provides that Park
shall have the right, at any time during the period commencing on the date which
is one year after the effective date of the 1999 Shareholder Agreement
(September 2, 2000) and ending on the date which Park ceases to beneficially
own, together with all of its affiliates and associates, at least 10% of the
outstanding Common Stock of Paracelsus, to request that Paracelsus register
under the Securities Act of 1933, as amended (the "Act"), all or a portion of
the Common Stock of Paracelsus held by Park (the "Registration Shares") for sale
in the manner specified in such request (the "Demand Registration"). Paracelsus
is not required to effect more than two such registrations. In addition, if
Paracelsus at any time proposes to register any of its Common Stock (other than
pursuant to a Demand Registration) or other equity securities under the Act for
sale to the public for its own account or for the account of other shareholders
or both (except with respect to registration statements on Form S-4 or S-8 or
another form not available for registering the Registration Shares for sale to
the public), Paracelsus will give notice to Park of its intention to effect such
registration. Upon the request of Park to register any of the Registration
Shares, Paracelsus will use its reasonable efforts to cause the Registration
Shares as to which registration shall have been so
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requested to be included in the securities to be covered by the registration
statement proposed to be filed by Paracelsus.
Termination. The 1999 Shareholder Agreement shall terminate
automatically without any action by any party upon the earliest to occur of (i)
Park, together with all of its affiliates and associates, ceasing to
beneficially own at least 5% of the total voting power of Paracelsus and (ii)
Park, together with all of its affiliates and associates, beneficially owning at
least 90% of the total voting power of Paracelsus.
The discussion herein of the 1999 Shareholder Agreement is subject to
and qualified in its entirety by reference to such agreement, a form of which is
filed as an exhibit to this Schedule 13D and is incorporated herein by
reference.
In addition to the 1999 Shareholder Agreement, Park is the holder of a
$7.2 million 6.51% subordinated promissory note of Paracelsus. The note provides
for payments of principal and interest in an aggregate annual amount of $1.0
million over a term of 10 years. Park previously waived its right to receive
principal payments under the note until all obligations of the Paracelsus under
its credit agreement have been satisfied. In connection with the settlement of
the Shareholder Litigation, Paracelsus agreed that commencing with the annual
payment due in August 2000, it will recommence payment of principal in
accordance with the note's stated terms and will use its reasonable best efforts
to seek approval from its lenders to repay principal amounts under the note that
are in arrears. In addition, Paracelsus has agreed to prepay the outstanding
balance of the note in certain circumstances.
Except as described above, the Reporting Persons do not have any
contracts, arrangements, understandings or relationships with respect to any
securities of Paracelsus.
Item 7. Material to be Filed as Exhibits.
The documents listed below are filed as exhibits to this Schedule 13D:
Exhibit E Amended and Restated Joint Filing Agreement between
the Reporting Persons, dated December 8, 1999.
Exhibit F Shareholder Agreement, dated March 19, 1999,
between Park and Paracelsus (Incorporated by
Reference to Exhibit 10.78 of Issuer's Quarterly
Report on Form 10-Q for the Quarterly Period ended
June 30, 1999).
Exhibit G Settlement Agreement, dated March 24, 1999, by and
among the Champion Shareholders, Park, Professor
Krukemeyer and Paracelsus (Incorporated by Reference
to Exhibit 10.79 of Issuer's Quarterly Report on Form
10-Q for the Quarterly Period ended June 30, 1999).
Exhibit H Stipulation of Settlement, dated May 11, 1999, by and
among plaintiffs, individually and as representatives
of the Class, as defined, Paracelsus, Manfred G.
Krukemeyer, R.J. Messenger, James T. Rush, Charles R.
Miller, James G. VanDevender, the Champion
Shareholders, Park, Donaldson Lufkin & Jenrette
Securities Corporation, Bear Stearns & Co., Inc.,
Smith Barney, Inc., and ABN AMRO Chicago Corporation
in connection with the litigation captioned IN RE
PARACELSUS CORP. SECURITIES LITIGATION, Master File
No. H-96-3464 (EW) filed with the United States
District Court for the Southern District of Texas
(Incorporated by Reference to Exhibit 10.80 of
Issuer's Quarterly Report on Form 10-Q for the
Quarterly Period ended June 30, 1999).
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Exhibit I Settlement Agreement, dated March 17, 1999, by and
between James G. Caven and Robert Orovitz,
derivatively on behalf of Champion and double
derivatively on behalf of Paracelsus, Paracelsus, the
Champion Shareholders, Park, Donaldson Lufkin &
Jenrette Securities Corporation, Bears Stearns & Co.,
Smith Barney, Inc., and ABN AMRO Chicago Corporation,
Manfred Georg Krukemeyer, Charles R. Miller, James G.
VanDevender, Ronald R. Patterson, R.J. Messenger,
James T. Rush, Robert C. Joyner, Michael D. Hofmann,
Christian A. Lange, and Scott K. Barton (Incorporated
by Reference to Exhibit 10.81 of Issuer's Quarterly
Report on Form 10-Q for the Quarterly Period ended
June 30, 1999).
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SIGNATURES
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After reasonable inquiry and to each signatory's best knowledge and
belief, each of the undersigned hereby certifies that the information set forth
in this statement is true, complete and correct.
PARK-HOSPITAL GmbH
By: /s/ Armin Sulberg
---------------------------------
Armin Sulberg
PARACELSUS-KLINIKEN-DEUTSCHLAND GmbH
By: /s/ Armin Sulberg
------------------------------------
Armin Sulberg
/s/ Dr. Heiner Meyer zu Losebeck
--------------------------------------
Dr. Heiner Meyer zu Losebeck, signing
solely as a co-executor of the estate
of Professor Dr. Hartmut Krukemeyer
/s/ Peter Frommhold
--------------------------------------
Peter Frommhold, signing solely as a
co-executor of the estate of Professor
Dr. Hartmut Krukemeyer
Dated: December 8, 1999
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AMENDED AND RESTATED JOINT FILING AGREEMENT
In accordance with Rule 13d-1(k) under the Securities Exchange Act of
1934, as amended, each of the persons named below agrees to the joint filing of
a Statement on Schedule 13D, including amendments thereto, with respect to the
Common Stock, without stated value, of Paracelsus Healthcare Corporation, and
further agree that this Amended and Restated Joint Filing Agreement be included
as an exhibit to such filings; provided, that, as contemplated by Rule
13d-1(k)(1)(ii), no person shall be responsible for the completeness or accuracy
of the information concerning the other persons making this filing, unless such
person knows or has reason to believe that such information is inaccurate. This
Amended and Restated Joint Filing Agreement may be executed in any number of
counterparts, all of which collectively shall constitute one and the same
instrument.
Dated: December 8, 1999
PARK-HOSPITAL GmbH
By: /s/ Armin Sulberg
-----------------------------------
Armin Sulberg
PARACELSUS-KLINIKEN-DEUTSCHLAND GmbH
By: /s/ Armin Sulberg
------------------------------------
Armin Sulberg
/s/ Dr. Heiner Meyer zu Losebeck
---------------------------------------
Dr. Heiner Meyer zu Losebeck, signing
solely as a co-executor of the estate
of Professor Dr. Hartmut Krukemeyer
/s/ Peter Frommhold
----------------------------------------
Peter Frommhold, signing solely as
a co-executor of the estate of Professor
Dr. Hartmut Krukemeyer
11
