Med Diversified, Andover, Mass., filed a $1 billion lawsuit against National Century Financial Enterprises, Dublin, Ohio, its former chairman and CEO, Lance Poulsen; two related bond funds; and two U.S. banks that serve as trustees. The suit was filed in U.S. District Court in Boston. At deadline, further details were unknown. A Med Diversified subsidiary, Tender Loving Care Health Services, sought Chapter 11 bankruptcy protection last week, citing NCFE's failure to pay promised cash. On Monday, PhyAmerica Physician Group, Durham, N.C., became the second national healthcare provider to seek bankruptcy protection citing the finance firm's collapse. PhyAmerica, a physician practice management company specializing in emergency medicine, said it filed a Chapter 11 bankruptcy petition in U.S. Bankruptcy Court, Baltimore. NCFE hasn't paid customers since before Oct. 25, when its bonds were downgraded. The company buys healthcare providers' accounts receivable and then pays them from bond proceeds. -- by Mark Taylor
National Century fallout continues
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