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Biotech / Medical : FPA Medical Management - FPAMQ -- Ignore unavailable to you. Want to Upgrade?

To: Janethu who wrote (1019)	7/22/1998 2:52:00 AM
From: Gary Schmidt	Respond to of 1110

Found this on Yahoo....sounds like there may be a bit of hope here! FPA in bankruptcy court Managed-care firm proposes reorganization By Craig D. Rose STAFF WRITER July 21, 1998.......PT2 Bankruptcy attorneys unconnected with FPA, however, said such plans can be delayed or derailed by litigation. "It will probably take at least three to four months for a petition like this," said John Smaha, a San Diego lawyer who specializes in business reorganization. Committees probably will be appointed to represent bondholders and shareholders in the case, he added. No matter what the timing, the bankruptcy filing continues a dramatic chain of events for a company that rocketed from revenues of $18 million in 1994 to more than $1 billion last year. FPA functioned typically as a subcontractor to large HMOs, accepting fixed payments in exchange for providing all medical care. At its peak, the company was overseeing care for 1.4 million people through a network of about 7,700 doctors. But in recent weeks FPA's meteoric rise has been matched by a steep fall. In early May, FPA said it was running out of cash, was losing money on contracts and had overpaid for its acquisitions. That came just seven weeks after Dr. Seth Flam, who had guided the company since its public offering, resigned with a declaration that the company was poised for strong growth this year. Flam departed with a severance package valued at $4.8 million. More than a dozen shareholder lawsuits quickly followed, at least one of which included allegations of $90 million in insider trading at the company. Despite raising $25 million this month, FPA last week missed the final deadline on making a $2.6 million interest payment. The company closed its offices in Texas, where it had provided care to 130,000 patients, then saw its contracts with PacifiCare canceled, under which it provided care to 200,000 people. Also last week, the company announced that Dr. Sol Lizerbram, a co-founder of the company, had resigned as chairman but was remaining with FPA as a director and consultant. During its peak years, Flam, Lizerbram and at least four other FPA executives received annual compensation of $1 million or more, in addition to stock options. Neither Flam nor Lizerbram has responded in recent weeks to telephone messages. In its bankruptcy filing, FPA proposes issuing 40 million new shares. Half would be distributed to the company's bankers -- who are the senior or first-in-line creditors. About 3 percent of the new shares, according to the company plan, would go to bondholders, who would also receive warrants, which are options to purchase shares at a fixed price. FPA further proposed making 8 percent of its new shares available through stock options to the management of the company, which FPA said would provide "incentives to return the company to profitability and maximize stakeholder value." The company also proposed to consolidate its corporate offices in Miami, where Dresnick is based. FPA's founders began the company in San Diego and have had its headquarters on Nobel Drive off Interstate 5, as well as an operations center near Texas Street in Mission Valley. For Gordon, meanwhile, FPA's problems have brought him full circle. "I joined FPA because I felt a tidal wave of managed care would sweep the nation and it was difficult to cope as a solo practitioner," said Gordon, who sold his practice to FPA for cash and received company stock as part of its bonus program for salaried doctors. "I'm afraid I have to go back to solo practice." FPAM: Quote \| Profile \| Research This Is a Reply to: Msg 12093 by Clarence_Perkins

To: Janethu who wrote (1019)	7/22/1998 5:01:00 PM
From: Douglas V. Fant	Read Replies (1) \| Respond to of 1110

Janethu, Yes! If you could go by the Secretary of State's Office and request a copy of the FPAM by laws, then that would be great! Just fax them to me @ 915-688-2034. I'll send you a check for the cost. Gang honestly we need to challenge this peremptory dumping of the owners of this Company initally under the relevant corporate by laws of FPAM since we are still the owners of FPAM. If Management prevents us from being able to call such a meeting, or allows a meeting but defeats our proposals, then at least we go into "Round Two" in the Federal Bankruptcy Proceeding and can say in good faith that we exhausted our remedies under the corporate by laws. This IMO strengthens our position to seek redress in the subsequent proceeding. That redress quite frankly should be that the 14,600,000 unallocated "new shares" of FPAM should be portioned out prorata to the current owners unless FPAM's Management can show me as an owner of the Company that this allocation would inhibit reorgnization of the Company (About a 1 to 3 reverse stock deal). I'm just a west Texas cowboy. But from where I stand I see that a big cattle rancher has come onto the common range and dynamited all of the local water holes people used for their own livestock, and then brought in "hired guns" to shoot anyone who dares to undo his unilaterally imposed solution as to who gets the "water". And pardnuh' that just ain't right. I may go down in flames but I'm going to do my best to see that you all are brought back to some sense of your obligations to shareholders under the articles of incorproation and corporate by laws. Might does not make right.... Sincerely, Doug F.