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 1934
March 22, 1999
Date of Report (Date of earliest event reported): (March 19, 1999)
RIGHTCHOICE MANAGED CARE, INC.
(Exact Name of Registrant as Specified in Its Charter)
MISSOURI
(State or Other Jurisdiction of Incorporation)
1-13248 43-1674052
(Commission File Number) (I.R.S. Employer Identification No.)
1831 Chestnut Street, St. Louis, Missouri 63103-2275
(Address of principal executive offices) (Zip Code)
314-923-4444
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Item 1. Changes in Control of Registrant.
Not applicable.
Item 2. Acquisition or Disposition of Assets.
Not applicable.
Item 3. Bankruptcy or Receivership.
Not applicable.
Item 4. Changes in Registrant's Certifying Account.
Not applicable.
Item 5. Other Events.
STATUS OF LITIGATION RELATING TO THE REORGANIZATION AND PUBLIC OFFERING
On March 19, 1999, Blue Cross and Blue Shield of Missouri
(BCBSMo), parent company of the Registrant, petitioned the
Missouri Supreme Court to enter an Order of Prohibition directed
to Cole County Circuit Judge Thomas J. Brown III to limit his
actions relating to the litigation involving BCBSMo and the State
of Missouri while the case is on appeal to the Missouri Supreme
Court.
The press release dated March 22, 1999 is attached hereto as
Exhibit 99(a).
Item 6. Resignations of Registrant's Directors.
Not applicable.
Item 7. Financial Statements
Pro Forma Financial Statements and Exhibits.
(a) - (b) Not applicable.
(c) Exhibits Required by Item 601 of Regulation S-K:
99(a) Press Release dated March 22, 1999.
Item 8. Change in Fiscal Year.
Not applicable.
Item 9. Sales of Equity Securities Pursuant to Regulation S.
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, as amended, the Registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.
Dated: March 22, 1999.
RIGHTCHOICE MANAGED CARE, INC.
By: /s/ Sandra A. Van Trease
Sandra A. Van Trease
Chief Financial Officer, Senior
Executive Vice President and
Chief Operating Officer
EXHIBIT INDEX
Exhibit No. Description
99(a) Press Release dated March 22, 1999.
Exhibit 99(a)
CONTACT: Clara Kinner
(314) 923-6268
Deb Wiethop
(314) 923-4767
BLUE CROSS AND BLUE SHIELD OF MISSOURI ASKS
MISSOURI SUPREME COURT TO LIMIT
CIRCUIT COURT ACTION TO CONSIDERATION OF SETTLEMENT
ST. LOUIS, March 22, 1999 -- Blue Cross and Blue Shield of Missouri,
parent company of RightCHOICE Managed Care, Inc. (NYSE:RIT), on
Friday, March 19, asked the Missouri Supreme Court to enter an
order of prohibition directed to Cole County Circuit Court Judge
Thomas Brown III to limit his actions relating to the litigation
involving Blue Cross and the state while the case is on appeal to
the Missouri Supreme Court.
On March 12, state officials, Blue Cross and almost 100 consumer
groups representing 1 million Missourians filed a joint motion in
Cole County Circuit Court in support of the modified settlement
agreement and requested its approval.
At a hearing on March 15, Judge Brown stated that he has a number
of concerns that have not been addressed by the parties and that
he believes he has jurisdiction to enter a final dispositive
order in the case that is different from the terms of the
parties' settlement agreement, despite the pending appeal.
"We believe our petition to the Supreme Court is the best course
of action to protect the rights of our members, our shareholders
and the public," said John A. O'Rourke, chairman, president and
chief executive officer of RightCHOICE Managed Care, Inc., and
president and chief executive officer of Blue Cross and Blue
Shield of Missouri. "We were willing to place the appeal on hold
as we sought court approval of our settlement agreement, but
Judge Brown's informal response to the modified settlement
agreement indicates that he doesn't support it, despite the good
faith efforts by all parties to the litigation. We are extremely
disappointed on behalf of the community that this will delay the
creation of the Missouri Foundation for Health."
The company believes the circuit court has no jurisdiction to
conduct further judicial proceedings other than considering the
settlement because the case is on appeal to the Missouri Supreme
Court. The
- More -
Supreme Court stayed the briefing schedule in the appeal before it
while the parties presented the settlement agreement to Judge
Brown.
The modified settlement agreement calls for Blue Cross and Blue
Shield of Missouri to reorganize and be merged with RightCHOICE
Managed Care and for the creation of a charitable health care
foundation. The foundation will receive $12.95 million in cash
and approximately 80 percent of the stock of the new RightCHOICE.
The foundation will liquidate its stock in an orderly manner over
a period of time not to exceed seven years under a divestiture
plan, and the proceeds will be used to meet the health care needs
of under- and un-insured Missourians. The agreement, negotiated
in good faith among the parties, is intended to resolve
outstanding litigation and regulatory issues between the state
and Blue Cross, create a non-profit health care foundation and
move RightCHOICE forward as a consolidated, fully for-profit Blue
Cross and Blue Shield licensee.
Blue Cross has asked the Supreme Court to rule on its application
for relief on an expedited basis.
SAFE HARBOR
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: Estimates and other statements set forth
herein that are not historical facts are forward-looking
statements that involve risks and uncertainties. These risks and
uncertainties include, but are not limited to: the possibility of
an adverse ruling against Blue Cross in its litigation with the
state; the possibility that court approval of the modified
settlement agreement, referenced above, would not be obtained, or
if obtained, could include conditions that are not acceptable to
the parties; the possibility that all remaining contingencies and
conditions to the parties' obligations to effect the proposed
settlement transaction would not be met or otherwise satisfied;
governmental and regulatory action or legislation; pending
litigation; actions by the Blue Cross and Blue Shield Association
relating to the license to use the Blue Cross and Blue Shield
names, trademarks and service marks; market competition and
consolidation; escalating health care costs; dependence on sales
to individuals; recontracting efforts and potential of non-renewal
of subscriber and provider agreements; voting control by the
parent company; variability of operating results and stock price;
and additional factors and other risks detailed in the company's
Securities and Exchange Commission filings.
Blue Cross and Blue Shield of Missouri and its for-profit
subsidiary, RightCHOICE Managed Care, Inc., are the largest
providers of health care benefits in Missouri. The company's web
site address is www.abcbs.com.
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