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Biotech / Medical : ROTC:Rotech medical

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To: JEFF JORGENSON who wrote (66)	5/20/1997 8:54:00 AM
From: David Lawrence	of 161

ORLANDO, Fla.--(BUSINESS WIRE)--May 20, 1997--A Florida subsidiary of RoTech Medical Corp. ("RoTech") (NASDAQ/NMS:ROTC) has reached a settlement with the U.S. Attorney for the Middle District of Florida in a civil action related to Medicare claims the government believes it erroneously paid between 1987 and 1989. This matter has been in litigation since May 1995, and RoTech has continuously disagreed with the factual and legal basis of the government's claim. RoTech has disclosed the claim in all required filings from the initial time of the investigation. RoTech remains confident that it was in compliance with all material Medicare and other legal requirements related to this matter. However, in an effort to reduce legal defense costs and to preserve internal resources, RoTech has paid $612,500 (approximately $380,000 on an after tax basis) to resolve the matter. These monies represent a repayment of a portion of the estimated disputed claims and related interest over approximately 10 years. This disposes of the only known claim pending by the United States against RoTech and its subsidiaries.

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