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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 1934
Date of Report (Date of earliest event reported) July 16, 1999
Physicians Resource Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-13778 76-0456864
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
14800 Landmark Blvd., Suite 500, Dallas, TX 75240
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (972) 892-7200
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Item 5. Other Events.
As previously reported by Physicians Resource Group, Inc. (the
"Company"), on March 19, 1999, Physicians Resource Group, Inc. (the "Company")
entered into a restructuring agreement (the "Restructuring Agreement") with
Resurgence Asset Management, LLC ("Resurgence"), which owns or manages
approximately $92 million of the Company's $125 million principal amount of 6%
Convertible Subordinated Debentures due 2001. The Restructuring Agreement
between the Company and Resurgence is contingent upon the consummation by the
Company of a restructuring by September 30, 1999.
Resurgence has notified the Company that Resurgence believes that
there has been a material breach by the Company regarding a representation
related to certain litigation discussed in the Restructuring Agreement, which
Resurgence believes provides it the right to terminate the Restructuring
Agreement. Resurgence also has questioned whether the Company has satisfied its
covenant to use its reasonable efforts to complete the restructuring by
September 30, 1999. The Company believes that it has used its reasonable efforts
to complete the restructuring; however, the Company does not believe that the
restructuring will be completed by September 30, 1999.
The Company intends to continue to pursue its restructuring. Since
January 1, 1999, the Company has been successful in completing sales of assets
used in connection with the operation of fifteen medical practices and certain
interests in six ambulatory surgery centers. In connection with those sales, all
litigation and other disputes with these affiliated medical practices and
surgery centers were resolved, approximately $6.4 million in principal amount of
notes payable by the Company to the affiliated medical practices were retired
and the management services agreements between the Company and the affiliated
medical practices were terminated. In connection with these asset sales, the
Company generated cash sufficient to allow it to retire approximately $9.5
million in bank indebtedness, as well as its $3.75 million loan from Resurgence
provided for in the Restructuring Agreement.
There can be no assurance that Resurgence will not attempt to
terminate the Restructuring Agreement based on the Company's alleged breach of
the Restructuring Agreement or any failure by the Company to complete its
restructuring by September 30, 1999.
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
(99.1) News release of Physicians Resource Group, Inc. dated July
20, 1999.
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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.
PHYSICIANS RESOURCE GROUP, INC.
Date: July 19, 1999 By: /s/ David Meyer
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David Meyer, Chairman of the Board
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EXHIBIT INDEX
Exhibit No. Description
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(99.1) News release of Physicians Resource Group, Inc. dated July 20,
1999.
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
PHYSICIANS RESOURCE GROUP, INC.
ANNOUNCES DEVELOPMENTS REGARDING
DEBENTURE RESTRUCTURING AGREEMENT
DALLAS, TEXAS C July 20, 1999 C Physicians Resource Group, Inc. ("PRG" or
the "Company") today announced that Resurgence Asset Management, L.L.C. ("RAM"),
the party with which the Company has entered into a restructuring agreement (the
"Restructuring Agreement") related to the Company's 6% Convertible Subordinated
Debentures due 2001, has notified the Company that RAM believes that there has
been a material breach by the Company of the terms of the Restructuring
Agreement and that such alleged breach provides RAM the right to terminate the
Restructuring Agreement. The Company does not believe that it has breached the
Restructuring Agreement and continues to pursue its restructuring. However, the
Company does not believe that it will complete its restructuring by September
30, 1999, the date by which the Restructuring Agreement indicates the Company's
restructuring must be completed.
The Company intends to continue to pursue its restructuring. Since January
1, 1999, the Company has been successful in completing sales of assets used in
connection with the operation of fifteen medical practices and certain interests
in six ambulatory surgery centers. In connection with those sales, all
litigation and other disputes with the affiliated medical practices and surgery
centers were resolved, approximately $6.4 million in principal amount of notes
payable by the Company to the affiliated medical practices were retired and the
management services agreements between the Company and the affiliated medical
practices were terminated. In connection with these asset sales, the Company
generated cash sufficient to allow it to retire approximately $9.5 million in
bank indebtedness, as well as its $3.75 million loan from Resurgence provided
for in the Restructuring Agreement.
There can be no assurance that RAM will not attempt to terminate the
Restructuring Agreement based on the Company's alleged breach of the
Restructuring Agreement or any failure by the Company to complete the
restructuring by September 30, 1999.
PRG is a provider of physician practice management services to eye care
practices and operates ambulatory surgery centers. Contact: Michael Yeary,
President (713) 629-5777 or Paul N. Silverstein, Andrews & Kurth L.L.P. (212)
850-2800.
Certain statements in this news release consist of forward-looking
statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. As such, they involve risks and uncertainties as
detailed from time to time in the reports filed by the Company with the
Securities and Exchange Commission, including the Company's Annual Report on
Form 10-K, as amended, for the year ended December 31, 1997.
