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SCHEDULE 14A INFORMATION
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Northstar Health Services, Inc.
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(Name of Registrant as Specified In Its Charter)
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Northstar Health Services Inc. Press Release
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PRELIMINARY
For more information contact: Melissa M. Krantz
The Krantz Group, Inc.
(212)891-7235
For Immediate Release
Northstar Retains Advest to Maximize Value
Cites Insider Trading By Dissident Group
(Indiana, Pennsylvania) -- March 10, 1997 -- Northstar Health Services,
Inc. says it has filed a preliminary Schedule 14A Revocation of Consent
Statement with the Securities and Exchange Commission. The filing details why
Northstar believes shareholders should support the current Board and urges
shareholders to revoke any consent they may already have filed at the request of
the "Committee" organized by Thomas W. Zaucha, recently terminated for cause
from his position as Northstar's CEO.
According to the Company, Zaucha and Commonwealth have acted
irresponsibly toward shareholders through persistent acts of conflicts of
interest, attempts to remove corporate assets, and apparent acts of insider
trading and stock price manipulation. Unbeknownst to the Company, Zaucha
purchased 75,000 shares of Northstar common stock during December 1996 while in
possession of material insider information. These purchases, together with
purchases by others associated with his "Committee", represent egregious acts of
securities fraud.
In joining with Commonwealth, Mr. Zaucha further defied the admonitions of
Northstar's Special Counsel to the Investigation and the Board of Directors
which terminated the Company's relationship with Commonwealth in October 1996
for its refusal to cooperate with the Special Investigation of the Board. The
investigation was conducted to resolve questions regarding the resignation of
KPMG Peat Marwick L.L.P., who had cited concerns about related-party
transactions and issues of management integrity.
The Company stated, given the fraud revealed by its investigation and
litigation against prior management, Northstar's turnaround requires
considerable time and involvement on the part of the Board of Directors and
management if it is to be completed. In the Board's view, it is a process that,
because of the Board's extensive knowledge of the Company's business, operations
and customers, will be better carried out by this Board than by the Committee's
nominees.
In a related matter, Northstar reconfirmed its commitment to explore all
alternatives to maximize shareholder value by instructing Advest, Inc., its
financial adviser, to aggressively pursue all such opportunities including
those which Zaucha or his Committee may propose.
Northstar Health Services, Inc. is a leading regional provider of
rehabilitation therapy, mobile diagnostics, subacute contracted care and related
services at outpatient rehabilitation clinics and by contact to other health
care facilities in Pennsylvania, Ohio, Illinois and West Virginia.
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