Paracelsus Healthcare Corporation Announces New Confirmation Hearing Date, Settlement of Government Claim, and Modification of Bankruptcy Plan Of Reorganization

Apr 23, 2001, 01:00 ET from Paracelsus Healthcare Corporation

    HOUSTON, April 23 /PRNewswire Interactive News Release/ -- Paracelsus
 Healthcare Corporation (OTC Bulletin Board:   PLHCQ) announced today that the
 Bankruptcy Court in Houston, Texas has set May 22, 2001 as the date for a
 hearing to consider confirmation of the Company's First Amended Chapter 11
 Plan of Reorganization (the "Plan").  Earlier dates for a confirmation hearing
 had been postponed to permit time to address two proofs of claim filed by a
 private person (the "relator") on behalf of the United States and the State of
 California, as described in the Company's December 11, 2000 and March 5, 2001
 press releases.  The original proofs of claim sought a total of approximately
 $94 million.  In March 2001, the United States and California filed amended
 proofs of claim seeking a total of approximately $46 million.
     To avoid the costs of further litigation and to proceed with confirmation
 of the Plan, Paracelsus recently signed a settlement agreement with the United
 States, California, and the relator to resolve their proofs of claim.  In
 general, the principal settlement terms are the following:  The United States,
 California, and the relator agreed to grant Paracelsus certain releases and to
 dismiss the litigation against Paracelsus pending in another federal court.
 Paracelsus agreed that the United States, California, and the relator would
 have allowed general unsecured claims in the bankruptcy case in the aggregate
 amount of $5.5 million and that the allowed claims would be treated as Class 4
 Claims, entitled to share with other Class 4 claimants in a distribution of
 new notes and common stock of the reorganized Paracelsus to be issued under
 the Plan.  Paracelsus also agreed to enter into a Corporate Integrity
 Agreement with the Office of Inspector General of the U.S. Department of
 Health and Human Services.  The Company denied any liability or wrongdoing.
     The settlement agreement is subject to approval by the Bankruptcy Court.
 The Court set May 22, 2001 as the date for a hearing to consider approval of
 the settlement along with the Company's Plan.
     The Company also filed a motion today in its Bankruptcy case to modify its
 proposed Plan of Reorganization, reflecting changes made necessary by the
 settlement and by revisions in the Company's projected future operating
 results primarily as a result of heightened competition from the opening of a
 new hospital in the market served by its hospital in Fargo, North Dakota, as
 previously reported.  The modification would provide that on confirmation of
 the Plan, the shares of the Company's common stock held by existing equity
 holders will be canceled and rendered null and void, and that such current
 equity holders will not receive stock or warrants, as had previously been
 provided in the Plan.  Pursuant to the Plan, as amended, the Company's current
 equity holders will neither receive nor retain any property under the Plan on
 account of such equity interests.
     Paracelsus Healthcare Corporation, a public company currently listed on
 the OTC Bulletin Board, was founded in 1981 and is headquartered in Houston,
 Texas.  Including a hospital partnership, Paracelsus presently owns the stock
 of hospital corporations that own or operate 10 hospitals in seven states with
 a total of 1,287 beds.  Additional Company information may be accessed through
 http://www.prnewswire.com under the Company's name.
 
     Certain statements contained herein are "forward-looking statements" made
 pursuant to the safe harbor provisions of the Private Securities Litigation
 Reform Act of 1995.  Forward-looking statements involve a number of risks and
 uncertainties.  All statements regarding the Company's expected future
 financial position, results of operations, cash flows, liquidity, financing
 plans, business strategy, budgets, projected costs and capital expenditures,
 competitive position, growth opportunities, plans and objectives of management
 for future operations and words such as "anticipate," "believe," "plan,"
 "estimate," "expect," "intend," "may" and other similar expressions are
 forward-looking statements.  Such forward-looking statements are inherently
 uncertain, and stockholders must recognize that actual results may differ
 materially from the Company's expectations as a result of a variety of
 factors, including, without limitation, those discussed below.
      --  Factors which may cause the Company's actual results in future
          periods to differ materially from forecast results include, but are
          not limited to: (i) uncertainties related to PHC's voluntary petition
          under Chapter 11 of the Bankruptcy Code including, but not limited
          to, (a) the Company's ability to consummate, in substantial terms,
          the Plan of Reorganization, as proposed, (b) actions which may be
          taken by creditors and the outcome of various administrative matters
          in the Chapter 11 proceeding and (c) the possibility of delays in the
          confirmation and/or the effective date of the Plan of Reorganization;
          (ii) the Company's inability to access capital markets given the
          Company's current financial condition; (iii) the Company's senior
          management may be required to dedicate an excessive amount of time
          and effort dealing with the Company's financial condition with less
          time focusing directly on the operations of its businesses; (iv) the
          Company may be unable to retain top management and other key
          personnel, including physicians; (v) competition, including the
          impact of a new competing hospital that opened in November 2000 in
          the Fargo, North Dakota market, and general economic, demographic and
          business conditions, both nationally and in the regions in which the
          Company operates; (vi) existing government regulations and changes in
          legislative proposals for healthcare reform, including changes in
          Medicare and Medicaid reimbursement levels; (vii) the ability to
          enter into managed care provider arrangements on acceptable terms;
          (viii) liabilities and other claims asserted against the Company;
          (ix) the loss of any significant customer, including but not limited
          to managed care contracts; (x) the Company's ability to comply with
          the terms of the subsidiary level credit facility; (xi) the Company's
          ability to achieve profitable operations after the confirmation of
          the Plan of Reorganization; and (xii) the Company's ability to
          generate sufficient cash from operations to meet its obligations.
 
     The Company is generally not required to, and does not undertake to,
 update or revise its forward-looking statements.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X75852266
 
 

SOURCE Paracelsus Healthcare Corporation
    HOUSTON, April 23 /PRNewswire Interactive News Release/ -- Paracelsus
 Healthcare Corporation (OTC Bulletin Board:   PLHCQ) announced today that the
 Bankruptcy Court in Houston, Texas has set May 22, 2001 as the date for a
 hearing to consider confirmation of the Company's First Amended Chapter 11
 Plan of Reorganization (the "Plan").  Earlier dates for a confirmation hearing
 had been postponed to permit time to address two proofs of claim filed by a
 private person (the "relator") on behalf of the United States and the State of
 California, as described in the Company's December 11, 2000 and March 5, 2001
 press releases.  The original proofs of claim sought a total of approximately
 $94 million.  In March 2001, the United States and California filed amended
 proofs of claim seeking a total of approximately $46 million.
     To avoid the costs of further litigation and to proceed with confirmation
 of the Plan, Paracelsus recently signed a settlement agreement with the United
 States, California, and the relator to resolve their proofs of claim.  In
 general, the principal settlement terms are the following:  The United States,
 California, and the relator agreed to grant Paracelsus certain releases and to
 dismiss the litigation against Paracelsus pending in another federal court.
 Paracelsus agreed that the United States, California, and the relator would
 have allowed general unsecured claims in the bankruptcy case in the aggregate
 amount of $5.5 million and that the allowed claims would be treated as Class 4
 Claims, entitled to share with other Class 4 claimants in a distribution of
 new notes and common stock of the reorganized Paracelsus to be issued under
 the Plan.  Paracelsus also agreed to enter into a Corporate Integrity
 Agreement with the Office of Inspector General of the U.S. Department of
 Health and Human Services.  The Company denied any liability or wrongdoing.
     The settlement agreement is subject to approval by the Bankruptcy Court.
 The Court set May 22, 2001 as the date for a hearing to consider approval of
 the settlement along with the Company's Plan.
     The Company also filed a motion today in its Bankruptcy case to modify its
 proposed Plan of Reorganization, reflecting changes made necessary by the
 settlement and by revisions in the Company's projected future operating
 results primarily as a result of heightened competition from the opening of a
 new hospital in the market served by its hospital in Fargo, North Dakota, as
 previously reported.  The modification would provide that on confirmation of
 the Plan, the shares of the Company's common stock held by existing equity
 holders will be canceled and rendered null and void, and that such current
 equity holders will not receive stock or warrants, as had previously been
 provided in the Plan.  Pursuant to the Plan, as amended, the Company's current
 equity holders will neither receive nor retain any property under the Plan on
 account of such equity interests.
     Paracelsus Healthcare Corporation, a public company currently listed on
 the OTC Bulletin Board, was founded in 1981 and is headquartered in Houston,
 Texas.  Including a hospital partnership, Paracelsus presently owns the stock
 of hospital corporations that own or operate 10 hospitals in seven states with
 a total of 1,287 beds.  Additional Company information may be accessed through
 http://www.prnewswire.com under the Company's name.
 
     Certain statements contained herein are "forward-looking statements" made
 pursuant to the safe harbor provisions of the Private Securities Litigation
 Reform Act of 1995.  Forward-looking statements involve a number of risks and
 uncertainties.  All statements regarding the Company's expected future
 financial position, results of operations, cash flows, liquidity, financing
 plans, business strategy, budgets, projected costs and capital expenditures,
 competitive position, growth opportunities, plans and objectives of management
 for future operations and words such as "anticipate," "believe," "plan,"
 "estimate," "expect," "intend," "may" and other similar expressions are
 forward-looking statements.  Such forward-looking statements are inherently
 uncertain, and stockholders must recognize that actual results may differ
 materially from the Company's expectations as a result of a variety of
 factors, including, without limitation, those discussed below.
      --  Factors which may cause the Company's actual results in future
          periods to differ materially from forecast results include, but are
          not limited to: (i) uncertainties related to PHC's voluntary petition
          under Chapter 11 of the Bankruptcy Code including, but not limited
          to, (a) the Company's ability to consummate, in substantial terms,
          the Plan of Reorganization, as proposed, (b) actions which may be
          taken by creditors and the outcome of various administrative matters
          in the Chapter 11 proceeding and (c) the possibility of delays in the
          confirmation and/or the effective date of the Plan of Reorganization;
          (ii) the Company's inability to access capital markets given the
          Company's current financial condition; (iii) the Company's senior
          management may be required to dedicate an excessive amount of time
          and effort dealing with the Company's financial condition with less
          time focusing directly on the operations of its businesses; (iv) the
          Company may be unable to retain top management and other key
          personnel, including physicians; (v) competition, including the
          impact of a new competing hospital that opened in November 2000 in
          the Fargo, North Dakota market, and general economic, demographic and
          business conditions, both nationally and in the regions in which the
          Company operates; (vi) existing government regulations and changes in
          legislative proposals for healthcare reform, including changes in
          Medicare and Medicaid reimbursement levels; (vii) the ability to
          enter into managed care provider arrangements on acceptable terms;
          (viii) liabilities and other claims asserted against the Company;
          (ix) the loss of any significant customer, including but not limited
          to managed care contracts; (x) the Company's ability to comply with
          the terms of the subsidiary level credit facility; (xi) the Company's
          ability to achieve profitable operations after the confirmation of
          the Plan of Reorganization; and (xii) the Company's ability to
          generate sufficient cash from operations to meet its obligations.
 
     The Company is generally not required to, and does not undertake to,
 update or revise its forward-looking statements.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X75852266
 
 SOURCE  Paracelsus Healthcare Corporation