Maryland Physicians Care files suit in effort to block sale of PrimeHealth

Company says its offer is better for creditors

May 24, 2000|By Walter F. Roche Jr. | Walter F. Roche Jr.,SUN STAFF

The state insurance commissioner violated his own bidding guidelines and is depriving creditors of a Lanham health care company of more than $2.3 million, a Baltimore County company has charged in court filings.

Attorneys for Maryland Physicians Care, which has about 29,000 clients, made those charges yesterday when asking a Baltimore Circuit Court judge to block the proposed sale of PrimeHealth Corp. to Universal Health Plan for $2 million.

The petition also asks Judge Joseph H. H. Kaplan to order state Insurance Commissioner Steven B. Larsen to allow the sale of PrimeHealth, which has about 15,000 patients, to Maryland Physicians Care.

Saying that its bid is superior, Maryland Physicians said its proposal, which was turned down by Larsen, would give PrimeHealth's creditors nearly 67 cents on the dollar, compared with the Universal bid of about 33 cents on the dollar. State officials contend that Universal's bid amounts to 43 cents on the dollar.

"Simply put, Maryland Physicians' bid is far superior to Universal's," said J. R. Wood, chairman of the company's board of directors.

"As a matter of law," the petition states, "the commissioner, as receiver, lacks any discretion to sell PrimeHealth's stock at a price lower than that offered by the highest bidder."

Attorneys for the state have said that the sale to Universal would be in the best interest of all parties.

Also yesterday, Clifford Barnes, an attorney for Universal, said lawsuits brought by three business consulting firms recently were filed against Universal Health Care Systems LLC, and not against Universal Health Plan, the corporation that would take over PrimeHealth.

The suits were filed by Alliance Healthcare Solutions, RFG Associates, and Staiger and Associates. Officials of those firms said they provided consulting services to the group of physicians that formed Universal Health Plan.

"If the old corporation can't pay its bills, what will the new one do?" said Barbara Staiger, who said she is owed $7,583.

The RFG suit resulted in a $5,287 judgment, which was paid, said Robert F. Gricius, the owner of the company.

The third suit, seeking $60,000, was filed by Alliance, a Columbia-based firm that contends it was not paid, even though it helped Universal Health Care Systems locate more than $1 million in financing to complete the purchase of PrimeHealth.

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