A federal judge in Baltimore is blocking a Florida hospital system from canceling its contracts with bankrupt PPM PhyAmerica Physician Group after the physician in the process of selling PhyAmerica tried to sign the health system with a new emergency department management company he is starting.
U.S. Bankruptcy Court Judge E. Stephen Derby last Friday issued a one-year restraining order and a permanent injunction against physician entrepreneur Steven Scott, M.D., communicating with officials, employees and clients of Durham, N.C.-based PhyAmerica, a firm he controlled until resigning as chairman and CEO earlier this month.
Derby says the effort to convince North Broward Hospital District in Fort Lauderdale, Fla., to shift its ED services from PhyAmerica to Scott's new operation interferes with the proposed sale of the PPM to another physician entrepreneur and "will be a detriment to a successful reorganization process."
Last week, Derby gave his approval for an investment group headed by Steven Dresnick, M.D., of Miami to purchase PhyAmerica and its more than 200 hospital contracts for $90 million. Dresnick says his organization beat out Scott in a bankruptcy auction.
In a statement issued Tuesday, Dresnick says that Scott "was using proprietary company information to negotiate contracts for his new competing company."
A Miami-based publicist for Scott was not immediately available for comment just before the Christmas holiday.
Both Dresnick and Scott founded predecessor companies to PhyAmerica. Scott held a controlling stake in PhyAmerica when it was a publicly traded company, then privatized the firm in March 2002.
Dresnick sold Sterling Healthcare Group, which he founded in 1987, to FPA Medical Management in 1996. PhyAmerica purchased FPA in 1999. Scott founded Coastal Physician Group, which later became PhyAmerica.
PhyAmerica filed for Chapter 11 bankruptcy protection last year after its chief financier, scandal-plagued National Century Financial Enterprises, collapsed.