MedCath Corp., Charlotte, N.C., said it was proceeding with plans to dissolve after reviewing a lawsuit filed against the company by its former joint venture partners in the ownership of TexSan Heart Hospital, San Antonio. The suit, filed Sept. 18, argues that MedCath and affiliated entities breached certain contractual obligations, as well as fiduciary and other duties owed the physicians as a result of the sale of the hospital and defending against Justice Department allegations that are part of a pending national investigation into implantable defibrillators, according to a Securities and Exchange Commission filing.
Late News: MedCath still plans to dissolve in spite of partners' lawsuit
The plaintiffs seek compensatory damages of $3.3 million, as well as $6.6 million in exemplary damages and other relief. MedCath will vigorously defend itself against the suit, according to the filing. MedCath also said it would proceed Sept. 21 with plans to distribute $6.33 per share of common stock to shareholders of record Sept. 10, and file a certificate of dissolution in Delaware, according to the filing. MedCath telephone numbers listed on SEC filings were not working and the former physician owners of TexSan who filed the suit in Bexar County (Texas) District Court and are affiliated with SAHH Hospital Management, could not be located. MedCath and SAHH-affiliated entities sold TexSan for $78.5 million plus retention of working capital to Methodist Healthcare System of San Antonio in December 2010, with MedCath netting about $58 million, according to an SEC filing.
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