September 1991-Texas sues Psychiatric Institutes of America, a unit of NME, charging it made illegal payments to gain patient referrals and defrauded the state's Crime Victims' Compensation Fund.
October 1991-At public hearings in Texas, psychiatric patients tell harrowing stories about being hospitalized in NME facilities against their wills or kicked out when their insurance benefits expired. Hearings continued into 1992.
November 1991-NME tells analysts its second-quarter earnings will suffer as a result of lower psychiatric hospital admissions. Its stock price plummeted to a 52-week low. In a three-month period, the value of NME's outstanding shares dropped more than $1 billion.
April 1992-NME says it will write off $250 million before taxes in the fourth quarter because of plans to sell, convert or close an unspecified number of psychiatric hospitals and substance-abuse treatment centers.
June 1992-NME reaches an $8 million settlement with Texas over alleged abuses at its psychiatric hospitals.
September 1992-NME's profits plummet 29% in the first quarter of fiscal 1993. It blames continued losses on its beleaguered psychiatric division.
November 1992-In an effort to polish its tarnished image, NME taps former HHS Inspector General Richard Kusserow as a consultant to revamp the chain's policies and procedures.
April 1993-NME co-founders Richard K. Eamer, its president and chief executive officer, and Leonard Cohen, its chief operating officer, announce their resignations. Both retain board positions.
August 1993-NME fires back at insurers that accused it of fraud. It files a $250 million lawsuit against 19 insurance companies, charging them with conspiracy and fraud.
August 1993-Some 700 federal agents descend on NME headquarters and regional offices across the country, seizing patient records and other documents to pursue criminal investigations of the company and its officers.
April 1994-NME announces it's reached a tentative multimillion settlement with the federal government on fraud charges.
Source: News accounts