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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 194
Date of Report (Date of Earliest Event Reported):
April 24,1997
PHYSICIAN CORPORATION OF AMERICA
(Exact Name of Registrant as
Specified in its Charter)
0-21440
(Commission File Number)
Delaware 48-1006287
(State of Other Jurisdiction (IRS Employer
of Incorporation or Organization) Identification Number)
6101 Blue Lagoon Drive
Miami, Florida 33126
(Address of Principal Executive Offices)
(305)267-6633
(Registrant's Telephone Number
Including Area Code)
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Item 5. OTHER EVENTS
On April 24, 1997, in connection with the action styled STATE
OF FLORIDA, ET. REL. THE DEPARTMENT OF INSURANCE V PCA PROPERTY
& CASUALTY the ("DOI Action"), the motion of Physician
Corporation of America's (the "Company's") workers'
compensation subsidiary, PCA Property & Casualty Company
("PCA P&C"), for a continuance of the May 2, 1997,
court-ordered hearing on whether PCA P&C should be placed under
rehabilitation was denied by Florida's second judicial circuit
court. The court also indicated that the scope of the hearing
will be limited to determining whether PCA P&C is statutorily
insolvent on the date of hearing. Discussions are continuing
with the Florida Department of Insurance (the "DOI") regarding
resolution of the DOI Action, but to date have not been
successful.
Should the DOI be appointed receiver of PCA P&C, the Company
expects to (i) be unable to exercise control over day-to-day
operations of PCA P&C, (ii) lose access to the assets and
liabilities of the PCA P&C, which approximated $863 million and
$984 million, respectively, at December 31, 1996, and
(iii) become involved in disputes and perhaps litigation
regarding PCA P&C's deficit which was approximately
$121 million at December 31, 1996. For example, DOI has
claimed, and the Company denies, that (i) the Company has an
obligation to fund to PCA P&C approximately $22.0 million in
respect of federal income tax benefits, and (ii) PCA Solutions,
Inc. ("PCA Solutions"), the Company's workers' compensation
third-party administrator subsidiary, has been paid in full or
in large part for continuing future services to PCA P&C and
FB&E, a self-insured fund previously administered by PCA
Solutions, valued at approximately $38 million. Both of these
disputes relate to intercompany accounts which, if resolved in
the DOI's favor, would not result in an additional income
statement charge to the Company. Additionally, if the Company
were found responsible for the $121 million deficit, such
action would not result in any additional income statement
charge to the Company. However, should any of these matters be
resolved in favor of the DOI's position, the Company's
liquidity position would be adversely impacted. The Company's
liquidity position, after consideration of the restrictions
imposed by regulators regarding distributions from its
subsidiaries, is limited and insufficient to provide
immediately available cash to fund these disputes and deficit,
should that be required. Accordingly, although the Company
believes that the consequences of the DOI being appointed
receiver of PCA P&C could have a material adverse effect upon
the Company's liquidity, financial condition and result of
operations, such effect cannot be determined at this time.
In an unrelated matter, the Company was recently advised that
certain preliminary budget/forecast information of the Company
was inadvertently filed as an exhibit to PCA P&C's responses to
the DOI's petition for its appointment as receiver. Such
preliminary information has been withdrawn, and such data does
not reflect the Company's final budget or its expectation of
future financial results of operations. Any person receiving
this preliminary information should not rely upon it.
1
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SIGNATURES
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.
PHYSICIAN CORPORATION OF AMERICA
(Registrant)
By: /s/ Clifford W. Donnelly
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Clifford W. Donnelly
Senior Vice President of Finance
and Chief Financial Officer
By: /s/ Jay M. Grobowsky
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Jay M. Grobowsky
Date: April 28,1997 Vice President of Finance
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