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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTIONS 13 AND 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT
(DATE OF EARLIEST EVENT REPORTED): FEBRUARY 13, 1997
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HORIZON/CMS HEALTHCARE CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 1-9369 91-1346899
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation or org- Identification No.)
anization)
6001 INDIAN SCHOOL ROAD, N.E.
SUITE 530
ALBUQUERQUE, NEW MEXICO
(Address of principal
executive offices)
87110
(Zip Code)
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ITEM 5. OTHER EVENTS
Horizon/CMS Healthcare Corporation (the "Company") announced on February
13, 1997, that it had reached an agreement in principle to settle the claims
against it and certain of its current and former directors in the consolidated
class action lawsuit filed in New Mexico Federal District Court in April, 1996.
In this lawsuit, the plaintiffs alleged violations of federal and New Mexico
state securities laws. Among such violations, the plaintiffs alleged that the
Company, certain of its current and former directors and certain former direc-
tors of Continental Medical Systems, Inc. ("CMS"), disseminated materially
misleading statements or omitted disclosing material facts about the Company and
its operations.
Under the proposed settlement, the Company will pay a minimum amount of $17
million to resolve all claims against the Company and its current and former
directors, excluding those claims arising against the former directors of CMS
for conduct occurring prior to the merger between CMS and the Company. The
Company believes these excluded claims are covered by directors' and officers'
liability insurance. Under the settlement, the maximum amount payable by the
Company is $20 million to completely and finally resolve all claims in the
litigation, including any amounts related to claims against former directors of
CMS. In agreeing to settle the litigation, none of the defendants concede or
admit to any of the plaintiffs' claims. The settlement is subject to the
execution of definitive documentation and court approval.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Current Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HORIZON/CMS HEALTHCARE CORPORATION
By: /S/ SCOT SAUDER
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Scot Sauder
VICE PRESIDENT OF LEGAL AFFAIRS,
SECRETARY AND GENERAL COUNSEL
Date: February 20, 1997.
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