Two American Medical International shareholders have filed a suit to block the company's $3.3 billion acquisition, saying AMI officials didn't seek bids before agreeing to sell out to National Medical Enterprises.
The suit, which was filed in state District Court in Los Angeles, seeks class-action status. Such suits are common practice in mergers.
AMI officials declined to comment on the suit filed by Ruth LeWinter and Raymond Cayuso. At press time, NME spokeswoman Diana Takvam said she couldn't comment because the suit hadn't been served.
Minority AMI shareholders have been offered little choice but to accept the bid from Santa Monica, Calif.-based NME. AMI doesn't have to call a shareholder vote because the three investment groups that hold 60% of AMI stock already have approved the deal.
AMI shareholders will receive $19 in cash and 0.42 share of NME stock for each share (Oct. 17, p. 2).
In an unrelated suit, a group of Dallas psychiatrists who referred patients to NME psychiatric hospitals in Texas are suing some of their former patients. The psychiatrists filed a lawsuit in state District Court in Dallas, claiming they were slandered by former patients who told the media of abusive and fraudulent treatment.
Earlier this year, NME settled federal criminal and civil litigation by agreeing to pay $379 million in fines. However, the federal government continues to investigate former NME executives and psychiatrists involved in the fraudulent schemes.