- Current report filing (8-K)
07 July 2012 - 6:02AM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): June 30, 2012
MEDCATH CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware
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000-33009
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56-2248952
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(State or other jurisdiction of
incorporation or organization)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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10720 Sikes Place
Charlotte, North Carolina 28277
(Address of principal executive offices,
including zip code)
(704) 815-7700
(Registrants telephone number, including area code)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13d-4(c))
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Item 1.01 Entry into a Material Definitive Agreement
On July 2, 2012 MedCath Corporation (MedCath or the Company) entered into a definitive equity purchase agreement and
completed the sale of its 53.31% equity interest in Bakersfield Heart Hospital (BHH) and its secured loans to BHH to Cardiovascular Care Group (CCG). The transaction was effective June 30, 2012.
The purchase price for MedCaths equity interest and secured loans was approximately $38.1 million subject to post-closing working capital
adjustments. MedCath anticipates it will receive approximately $34.0 million in cash from the transaction after payment of taxes and closing costs. By completing this transaction, MedCath has realized the value of BHH reflected in its March 31,
2012 Form 10- Q filed with the United States Securities and Exchange Commission (the SEC) on May 10, 2012. The anticipated net cash proceeds do not include an estimate of BHHs liability, if any, retained by MedCath arising out
of the Department of Justices (DOJs) national investigation regarding implantable cardioverter defibrillators (the ICD Investigation) . The purchase agreement obligates MedCath to indemnify CCG for 53.31% of BHH
liabilities arising out of the ICD Investigation for the period prior to closing.
The foregoing summary is qualified in its entirety by
reference to the actual Equity Purchase Agreement dated June 30, 2012 by and among Cardiovascular Care Group, MedCath Corporation and MedCath Finance Company, LLC, which is filed as Exhibit 2.1 hereto.
Item 2.01 Completion of Acquisition or Disposition of Assets
The information set forth in Item 1.01 regarding BHH is incorporated herein by reference into this Item 2.01.
Item 8.01 Other Events
On August 17, 2011, MedCath filed a proxy statement
with the SEC (the Proxy) seeking stockholder approval of a plan of complete liquidation and dissolution of the Company (the Plan of Dissolution). The stockholders of MedCath approved the Plan of Dissolution on
September 22, 2011.
MedCaths Board of Directors believes the conditions outlined in the Proxy to file a certificate of dissolution
in accordance with Section 275 of the General Corporation Law of the State of Delaware (DGCL) (the Filing) by September 22, 2012 have been satisfied. As a result, the Company currently anticipates making the Filing
on or about September 22, 2012 and making a liquidating distribution to its stockholders as part of the Plan of Dissolution prior to the Filing (the Pre-Filing Distribution) currently estimated to be in the range of approximately
$5.75 to $6.25 per share. Exhibit 99.1 reflects the Companys calculation of the current estimated Pre-Filing Distribution using the total net asset value as of March 31, 2012 reflected in the Statement of Net Assets included in the
Companys Form 10-Q filed with the SEC on May 10, 2012.
The estimated Pre-Filing Distribution is a forward-looking statement that
was derived using the Companys current estimate of a cash holdback of approximately $48.0 to $58.0 million (the Holdback). The Holdback will be held by the Company as of the Filing and used in accordance with the DGCL to satisfy
all of the Companys contingent liabilities, including without limitation (a) any liabilities arising out of the DOJs ICD Investigation, the exact amount of which is currently unknown, (b) other currently unknown or
unanticipated liabilities due to the government for unknown reimbursement claims, such as recovery audits (RAC audits), cost report settlements, and any other unknown contingent liability that may arise during the normal course of
operations during the wind-down period, including legal claims and governmental investigations, as previously disclosed, and (c) a reserve of such additional amount as the Board of Directors determines to be necessary or appropriate under the
DGCL with respect to additional liabilities that may arise or be identified after the Filing. The Holdback will not be used to satisfy recorded wind-down liabilities as those are reflected in the Companys net asset value as reflected in the
Companys Form 10-Q filed with the SEC on May 10, 2012.
The Pre-Filing Distribution and the Holdback do not take into consideration
any tax benefits that may be realized as part of the wind-down process or the payment of contingent liabilities with funds included in the Holdback. The Pre-Filing Distribution also does not take into consideration other assets that may be converted
into cash subsequent to the Filing.
MedCaths management and Board of Directors will continue to evaluate the adequacy of the Holdback
and may make adjustments to the Holdback as they determine to be appropriate prior to making the Pre-Filing Distribution. The amount of the Pre-Filing Distribution is subject to the approval by the Board of Directors and is subject to numerous risk
factors listed in the Proxy and the Companys Form 10-K, as amended, filed with the SEC on December 14, 2011. The actual amount of the Pre-Filing Distribution could be less than the estimated range. Future additional distributions during
the three year wind-down period, if any, will be made after the Filing in accordance with the DGCL once provision has been made for all liabilities of the Company.
The Company will close its stock transfer books on the date on which the Filing is made and on that date the Companys common stock will cease to be quoted on a registered securities exchange and
will otherwise cease to be traded. The Company intends to announce the date of the Filing on a Form 8-K filed with the Securities Exchange Commission at least 20 days prior to the date on which the Filing is made.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
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.
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MEDCATH CORPORATION
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Date: July 6, 2012
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By:
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/s/ Lora Ramsey
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Lora Ramsey
Chief Financial
Officer
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INDEX TO EXHIBITS
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Exhibit No.
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Description
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Exhibit 2.1
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Debt and Equity Purchase Agreement by and Among CCG of California, LLC, HHBF, Inc. and MedCath Finance Company, LLC dated June 30, 2012
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Exhibit 99.1
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Estimated Pre-Filing Distribution to Shareholders
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