FORM 8-K
Items 1-2 Not Applicable.
Item 3. Bankruptcy or Receivership
On February 2, 2000. Integrated Health Services, Inc. (the "Company")
announced that it and several of its subsidiaries (collectively, the "Debtors")
filed voluntary petitions for protection under Chapter 11 of the United States
Bankruptcy Code (the "Bankruptcy Code") with the United States Bankruptcy Court
for the District of Delaware (the "Court") (Case Nos. 00-00389 through 00-00825
inclusive). The Debtors' cases have been consolidated for the purpose of joint
administration and have been assigned to Judge Mary F. Walrath. At hearings held
on February 2, the Court entered first day orders granting authority to the
Company and its subsidiaries to pay pre-petition and post-petition employee
wages, salaries, benefits and other employee obligations. The court also
approved orders granting authority, among other things, to pay pre-petition
claims of certain critical vendors and patient obligations. Until approval of
its plan of reorganization, the company intends to pay post-petition claims of
other vendors and providers in the ordinary course of business.
The court also approved, on an interim basis, the Company's $300
million debtor-in-possession financing (the "DIP Financing") with Citibank,
N.A.. The final hearing on the DIP Financing is scheduled for February 25, 2000.
The DIP Financing and the existing cash flows will be used to fund the Company's
ongoing operations during the restructuring.
Copies of the press releases issued by the Company are included as
exhibits to the filing and are incorporated herein by reference.
Certain statements set forth above, including, but not limited to, statements
containing the words "anticipates," "believes," "expects," "intends," "will,"
"may" and similar words constitute forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are based on management's current expectations and include known and
unknown risks, uncertainties and other factors, many of which the results or
performance to differ materially from any future results or performance
expressed or implied by such forward-looking statements. These statements
involve risks, uncertainties and other factors detailed from time to time in the
Company's filings with the Securities and Exchange Commissions. Such factors may
include, without limitation, the availability and terms of capital in light of
recent losses, cash flow shortfalls and the Company's Chapter 11 bankruptcy
filing; adverse actions which may be taken by creditors and the outcome of
various bankruptcy proceedings; the Company's ability to attract patients given
its current financial position; and the effects of healthcare reform and
legislation on the Company's business strategy and operations. The Company
cautions investors that any forward-looking statements. The Company cautions
investors that any forward-looking statements made by the Company are not
guarantees of future performance. The Company disclaims any obligation to update
any such factors or to announce publicly the results of any revisions to any of
the forward-looking statements included herein to reflect future events or
developments.
Item 4-6. Not Applicable
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
Not Applicable.
(b) Pro forma financial information.
Not Applicable.
(c) Exhibits.
Exhibit 99.1 Press Release dated February 2, 2000.
Exhibit 99.2 Press Release dated February 3, 2000.
Item 8-9. Not Applicable.
<PAGE>
SIGNATURES
Pursuant to the requires of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereuto duly authorized.
INTEGRATED HEALTH SERVICES, INC.
Dated: February 3, 2000 By: /s/ C. Taylor Pickett
---------------------
C. Taylor Pickett
Executive Vice President and
Chief Financial Officer
DRAFT
2/1/2000 12:15 PM
FOR IMMEDIATE RELEASE:
- ----------------------
Contact: Robert N. Elkins, M.D.
Chairman & CEO
Marc B. Levin
Executive Vice President
Integrated Health Services, Inc.
(410)773-1000
Available on the Internet: http://www.Ihs.com
INTEGRATED HEALTH SERVICES RECEIVES APPROVAL OF FIRST DAY ORDERS IN
CONNECTION WITH RESTRUCTURING UNDER CHAPTER 11
Sparks, MD, February 3, 2000 - Integrated Health Services, Inc. (OTC Bulletin
Board: IHSV) today announced that the United States Bankruptcy Court for the
District of Delaware entered first day orders granting authority to the Company
and its subsidiaries to pay pre-petition and post-petition employee wages,
salaries, benefits and other employee obligations. The Court also approved
orders granting authority, among other things, to pay pre-petition claims on
certain critical vendors and patient obligations. Until approval of its plan of
reorganization, the Company intends to pay post-petition claims of all other
vendors and providers in the ordinary course of business.
The Court also approved, on an interim basis, the Company's $300 million
debtor-in-possession (DIP) financing with Citibank, N.A. The final hearing on
the DIP financing is scheduled for February XX, 2000. The DIP financing and
existing cash flows will be used to fund the Company's ongoing operations during
the restructuring and will be more than ample for such purposes.
-more-
<PAGE>
Integrated Health Services is a highly diversified health services provider,
offering a broad spectrum of post-acute medical and rehabilitative services
through its nationwide healthcare network. IHS's post-acute services include
home respiratory services, subacute care, long term care and contract
rehabilitation services.
Statements in this press release concerning the Company's business outlook or
future economic performances, anticipated profitability, revenues, expenses or
other financial items, and product or service line growth, together with other
statements that are not historical facts, are "forward-looking statements" as
that term is defined under the Federal Securities Laws. Any forward-looking
statements are estimates, reflecting the best judgment of the party making such
statements based upon currently available information and involve a number of
risks, uncertainties and other factors which could cause actual results to
differ materially from those stated in such statements. Risks, uncertainties and
factors which could affect the accuracy of such forward-looking statements are
identified in the public filings made by the Company with the Securities and
Exchange Commission, and forward-looking statements contained in this press
release or in other public statements of the Company should be considered in
light of those factors. Such factors may include, without limitation, the
availability and terms of capital in light of recent losses, cash flow
shortfalls and the Company's Chapter 11 bankruptcy filing; adverse actions which
may be taken by creditors and the outcome of various bankruptcy proceedings; the
Company's ability to attract patients given its current financial position; and
the effects of healthcare reform and legislation on the Company's business
strategy and operations. There can be no assurance that factors will not affect
the accuracy of such forward-looking statements. The Company cautions investors
that any forward-looking statements made by the Company are not guarantees of
future performance. The Company disclaims any obligation to update any such
factors or to announce publicly the results of any revisions to any of the
forward-looking statements included herein to reflect future events or
developments.
###
[IHS LETTERHEAD]
NEWS AND INFORMATION
FOR IMMEDIATE RELEASE:
- ---------------------
Contact: Robert N. Elkins, M.D.
Chairman & CEO
Marc B. Levin
Executive Vice President
Integrated Health Services, Inc.
(410)773-1000
Available on the Internet: http://www.Ihs.com
INTEGRATED HEALTH SERVICES FILES VOLUNTARY PETITION FOR
BANKRUPTCY REORGANIZATION
Company to Continue Normal Operations; Receives Commitment for up to
$300 million in DIP Financing
Sparks, MD, February 2, 2000 - Integrated Health Services, Inc. (OTC Bulletin
Board: IHSV) today announced that IHS and many of its operating subsidiaries
have filed voluntary petitions with the U.S. Bankruptcy Court for the District
of Delaware to reorganize under Chapter 11 of the U.S. Bankruptcy Code in order
to restructure the company's debt obligations. The company elected to seek court
protection in order to facilitate its efforts to restructure its capital and
lease obligations.
In announcing today's Chapter 11 filing, company management emphasized that the
filing has been organized to permit normal operations of its long term care
facilities and other businesses.
To ensure that the company has the working capital necessary to operate its
business, it has obtained a commitment for up to $300 million in
debtor-in-possession (DIP) financing with Citibank, N.A. IHS has requested the
Court's permission to access the DIP financing to fund normal business
operations and other cash needs during the bankruptcy proceeding.
Because of significant debt repayment obligations, the company has commenced
discussions with its banks and other lenders regarding the restructuring of the
company's debt. The Court protection afforded by Chapter 11 will give the
company an opportunity
-more-
INTEGRATED HEALTH SERVICES, INC. o INVESTOR RELATIONS DEPARTMENT
910 Ridgebrook Road o Sparks, MD 21152 o 410-773-1035 o 410-773-1045(Fax)
<PAGE>
to develop a plan for reorganization with the goal of emerging from bankruptcy
in a stronger financial position. The company is also in discussions with some
of the owners of the long term care facilities it operates in an effort to
renegotiate or cancel certain unprofitable leases.
IHS is the seventh national provider to file for bankruptcy protection in the
past six months. Other companies which have filed include Vencor Inc., Sun
Healthcare Group Inc., Mariner Post-Acute Network, Inc., Lenox Health Care Inc.,
Frontier Group Inc., and Newcare Health Corporation.
"The dramatic impact of the implementation of the 1997 Balanced Budget act on
our revenues and cash flow severely impacted the company's ability to service
our current capital structure," said Robert N. Elkins, Chairman and Chief
Executive Officer. "We believe we are taking the appropriate steps to assure
that we emerge from the reorganization process with a sound capital structure.
During this process, we will not lose sight of our core mission of providing
quality patient care."
Integrated Health Services is a highly diversified health services provider,
offering a broad spectrum of post-acute medical and rehabilitative services
through its nationwide healthcare network. IHS's post-acute services include
home respiratory services, subacute care, long term care and contract
rehabilitation services.
Statements in this press release concerning the Company's business
outlook or future economic performances, anticipated profitability, revenues,
expenses or other financial items, and product or service line growth, together
with other statements that are not historical facts are "forward-looking
statements" as that term is defined under the Federal Securities Laws. Any
forward-looking statements are estimates, reflecting the best judgment of the
party making such statements based upon currently available information and
involve a number of risks, uncertainties and other factors which could cause
actual results to differ materially from those stated in such statements. Risks,
uncertainties and factors which could affect the accuracy of such
forward-looking statements are identified in the public filings made by the
Company with the Securities and Exchange Commission, and forward-looking
statements contained in this press release or in other public statements of the
Company should be considered in light of those factors. Such factors may
include, without limitation, the availability of terms of capital in light of
recent losses, cash flow shortfalls and the Company's Chapter 11 bankruptcy
filing; adverse actions which may be taken by creditors and the outcome of
various bankruptcy proceedings; the Company's ability to attract patients given
its current financial position; and the effects of the healthcare reform and
legislation on the Company's business strategy and operations. There can be no
assurance that factors will not affect the accuracy of such forward-looking
statements. The Company cautions investors that any forward-looking statements
made by the Company are not guarantees of future performance. The Company
disclaims any obligation to update any such factors or to announce publicly the
results of any revisions to any of the forward-looking statements included
herein to reflect future events or developments.
###
