Printer Friendly
The Free Library
23,403,340 articles and books


Fresenius Medical Care AG to Provide for 1996 Merger-Related Legal Matters Including Pending Commercial Insurer Litigation by Taking a Special Charge for 2001.

Business Editors & Health/Medical Writers

BAD HOMBURG, Germany--(BW HealthWire)--Feb. 13, 2002

Fresenius Medical Care AG (Frankfurt Stock Exchange: FME, FME3 - NYSE: FMS, FMS_p), the world's largest provider of dialysis products and services, today announced that it will accrue a special pre-tax charge of $258 million in the fourth quarter of 2001 ($177 million after tax) principally to address potential liabilities and legal expenses of the Company arising in connection with the W.R. Grace Chapter 11 proceedings and the cost of resolving the pending litigation and other disputes with certain commercial insurers.

Fresenius Medical Care AG also announced that the Company entered into an agreement in principle outlining terms of a process to resolve the pending litigation with Aetna Life Insurance Company and its affiliates (Aetna), one of the leading U.S. commercial insurance companies.

The special charge primarily comprises two major components:

1. Fresenius Medical Care has assessed the extent of potential

liabilities that the Company may be exposed to as a result of

the W.R. Grace Chapter 11 proceedings, in particular

pre-merger tax liabilities of W.R. Grace. Fresenius Medical

Care will accrue $172 million pre-tax to provide for such

potential liabilities and the costs of defending the Company

in litigation arising out of W.R. Grace's Chapter 11 filing.

The Company will continue to vigorously seek existing

indemnification against these pre-merger liabilities from W.R.

Grace and from Sealed Air Corporation, formerly known as Grace

Holding, Inc.

2. Fresenius Medical Care has entered into an agreement in

principle with Aetna to establish, among other things, a

process for resolving its pending litigation and the basis for

a cooperative relationship that will continue to improve renal

patient care, reduce clinical costs and streamline

administrative procedures. The Company is optimistic that

these terms will also provide a basis for resolving pending

matters with the remaining commercial litigants and has

therefore included in the special charge an amount of $56

million pre-tax to provide for settlement obligations, legal

expenses and disputed accounts receivable. If the Company is

unable to settle the pending matters with any of the remaining

commercial insurers, whether on the basis of the Aetna

agreement in principle or otherwise, the Company believes that

this charge reasonably estimates the costs and expenses

associated with such litigation.

The remaining amount of around $ 30 million pre-tax will be accrued for other 1996 merger-related legal issues.

Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented, "We are pleased with these significant steps to provide for and resolve the remaining legal matters dating back to our 1996 National Medical Care transaction and we believe that this puts those matters financially behind us. We believe we found a model with Aetna that sets the stage for a productive relationship, and I would like to compliment Aetna for its commitment to patient care and its willingness to work creatively with us. I am optimistic that this agreement will provide the basis to resolve similar disputes with other commercial insurers. We have worked hard since Grace filed for Chapter 11 in 2001 to assess the potential impact of that filing on the Company and to encourage Grace and its affiliates to honor the obligations they undertook to us in 1996. At the same time, we have carefully assessed the potential liabilities arising from that filing and the costs to enforce our legal rights. We continue to enforce vigorously our indemnification from W.R. Grace and Sealed Air Corporation and assert our rights under the law. With these steps to provide for resolution of the 1996 merger-related issues, we will continue our focus on operational excellence, strong financial performance and the transformation of Fresenius Medical Care from the largest worldwide provider of dialysis products and services to the leading renal therapy company."

Fresenius Medical Care AG is to announce fourth quarter and full year 2001 results on March 5, 2002. The Company expects to achieve earnings after tax, excluding the special charge, to be in the range of $240-245 million for the fiscal year 2001.

Fresenius Medical Care AG is the world's largest, integrated provider of products and services for individuals with chronic kidney failure, a condition that affects more than 1,000,000 individuals worldwide. Through its network of more than 1,375 dialysis clinics in North America, Europe, Latin America and Asia-Pacific, Fresenius Medical Care provides dialysis treatment to approximately 103,850 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products.

For more information about Fresenius Medical Care, visit the Company's website at http://www.fmc-ag.com.

This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG does not undertake any responsibility to update the forward-looking statements in this release.
COPYRIGHT 2002 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2002, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

 Reader Opinion

Title:

Comment:



 

Article Details
Printer friendly Cite/link Email Feedback
Publication:Business Wire
Date:Feb 13, 2002
Words:868
Previous Article:Abitibi-Consolidated's $50 Million Deinking Plant in Thorold, Ontario, Nears Completion, in an Advisory by Industrialinfo.com.
Next Article:Warrantech Corporation Reports Net Income for Third Quarter 2002; Seventh Consecutive Quarter of Profitable Performance.
Topics:



Related Articles
German Stock Exchange Confirms Dax Membership of Fresenius Medical Care AG.
Fresenius Medical Care AG Announces Preliminary Third Quarter 1999 Results From Operations Before Material Charge to Resolve U.S.A. Legal Issues.
Fresenius Medical Care AG Announces Preliminary Agreement On U.S. Legal Issues and Complete Results for Third Quarter 1999.
Fresenius Medical Care Fact Sheet.
Fresenius Medical Care AG to Acquire the International and Non-Continental Operations of Total Renal Care Holdings, Inc.
Fresenius Medical Care AG Closed the Acquisition of Everest Healthcare Services Corporation.
Fresenius Medical Care AG: Company Supports Legal Position On Pending U.S. Matters With Higher Expenses and Significant Increase in the Allowance for...
Fresenius Medical Care AG Reports Fourth Quarter and Full Year 2001 Results; 2001 Earnings Grew 15% to $245 Million; Fourth Quarter Free-Cash Flow...
Fresenius Medical Care AG's Affiliate Renaissance Health Care, Inc. Launches Program for Renal Disease Management With U.S. State of Washington...
Fresenius Medical Care Announces Result of Class D Special Dividend Calculations; The Company intends to redeem these shares in early 2003 for $ 0.10...

Terms of use | Copyright © 2014 Farlex, Inc. | Feedback | For webmasters