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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 20, 1999
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CORAM HEALTHCARE CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-11343 33-0615337
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(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
1125 Seventeenth Street, Suite 2100, Denver, Colorado 80202
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(Address of Principal Executive Offices) (Zip Code)
(303) 292-4973
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(Registrant's telephone number, including area code)
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Item 5. Other Events.
On August 20, 1999, Coram Healthcare Corporation (the "Company")
issued a press release relating to the filing of an involuntary bankruptcy
petition under Chapter 11 of the Bankruptcy Code against one of its
subsidiaries, Coram Resource Network, Inc. The press release is attached hereto
as Exhibit 99.1 and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(a) None.
(b) None.
(c) Exhibits.
99.1 Press Release, issued August 20, 1999, relating to
the filing of an involuntary bankruptcy petition
under Chapter 11 of the Bankruptcy Code against
Coram Resource Network, Inc., a subsidiary of Coram
Healthcare Corporation.
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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 hereunto duly authorized.
CORAM HEALTHCARE CORPORATION
By: /s/ Wendy L. Simpson
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Wendy L. Simpson
Executive Vice President and
Chief Financial Officer
Date: August 23, 1999
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EXHIBIT INDEX
99.1 Press Release, issued August 20, 1999, relating to the filing of an
involuntary bankruptcy petition under Chapter 11 of the Bankruptcy
Code against Coram Resource Network, Inc., a subsidiary of Coram
Healthcare Corporation.
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EXHIBIT 99.1
CORAM STATEMENT CONCERNING INVOLUNTARY PETITION FILED AGAINST SUBSIDIARY
DENVER--Aug. 20, 1999--A small group of providers with claims amounting to
approximately $2.1 million filed on Aug. 19, 1999 an Involuntary Chapter 11
Bankruptcy Petition against Coram Resource Network, Inc., a subsidiary of Coram
Healthcare Corp (NYSE:CRH).
The filing is not against Coram Healthcare, the parent company, or any of Coram
Healthcare's other subsidiaries. The group of providers, which includes Apria
Healthcare Inc., a Coram competitor, rendered services pursuant to contracts
with Coram Resource Network, Inc. Coram Healthcare has also learned that Apria
and one of its affiliates filed suit on Aug. 16, 1999 in California State Court
regarding their specific provider claims that allegedly total approximately $2
million. The services were rendered as part of a network in connection with a
Master Agreement between Coram Healthcare and Aetna U.S. Healthcare for the
management of Aetna's home healthcare services in eight states in the Northeast
and Mid-Atlantic.
Coram Healthcare has filed a lawsuit against Aetna, alleging claims for fraud,
negligent misrepresentation, breach of contract, and rescission related to the
Master Agreement which Coram terminated effective June 30, 1999. In its lawsuit
against Aetna, Coram is seeking damages in excess of $50 million, including
damages related to these provider claims.
Coram Healthcare and Coram Resource Network Inc. are disappointed by the
Petition because Coram Resource Network Inc. was working toward reconciling the
amounts due to providers so as to pay the providers amounts properly due. The
steps Coram Resource Network Inc. has taken have included attempting to get
Aetna to pay various claims since Aetna has previously drawn on $14.5 million
worth of letters of credit earmarked to pay the providers. Coram Resource
Network Inc. will analyze the filings, raise any applicable defenses, pursue
all available grounds for dismissal of the involuntary petition, and assert any
applicable claims against the petitioning providers and any counterclaims
against applicable parties at the appropriate time.
Denver-based Coram is a leading provider of high quality home infusion therapy
operating from 90 locations in 44 states and Ontario, Canada. Through its
Resource Network division, the company manages networks of home healthcare
providers on behalf of managed care plans and other payers. Coram's
Prescription Services division provides pharmacy benefit management services as
well as mail order prescription drugs for chronically ill patients. The
Clinical Research and Medical Informatics Division provides home care and
product development services to pharmaceutical, biotechnology and medical
device companies sponsoring clinical trials.
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For more information, visit Coram's Web site at www.coramhealthcare.com.
Note: Except for historical information, all other statements provided in this
news release are "forward-looking" within the meaning of the Private Securities
Litigation Reform Act of 1995. The company's actual results may vary materially
from the forward-looking statements made above due to important factors such as
the company's history of operating losses and uncertainties associated with
future operating results; significant outstanding indebtedness; equity
conversion rights held by existing debt holders; limited liquidity;
reimbursement-related risks; shifts in the mix of parties that pay for the
company's services; dependence upon relationships with third parties; uncertain
future liabilities under capitation arrangements; concentration of large
payors; the intensely competitive industry; the timing of or ability to
complete acquisitions; government regulation of the home health care industry;
certain legal proceedings; dependence on key personnel; recruitment and
retention of trained personnel; potential volatility of stock price; New York
Stock Exchange listing status; and unanticipated impacts from the Year 2000
issue. These and other risk factors that could affect Coram's financial results
are further described in the company's Form 10-K Annual Report, as amended,
Form 10-Q Quarterly Reports, and Form 8-K Current Reports on file with the
Securities and Exchange Commission.
