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QUALMED RESCHEDULES SPECIAL MEETING OF STOCKHOLDERS

 PUEBLO, Colo., Jan. 11 /PRNewswire/ -- QualMed Inc. (NYSE: MQ) announced today that it has rescheduled its Special Meeting of Stockholders, originally scheduled for Jan. 7, 1994, for Tuesday, Jan. 25, 1994. The purpose of the Special Meeting is for stockholders of QualMed to consider and vote upon the proposed business combination of QualMed and HN Management Holdings Inc. ("HNMH").
 QualMed previously determined to postpone the Jan. 7 meeting following the jury verdicts against Health Net announced in late December in Riverside (California) Superior Court by the jury in the Nelene Fox case. Such verdicts total approximately $89 million, including approximately $12 million in actual damages and $77 million in punitive damages.
 As previously announced, following such verdicts, a Special Committee of the QualMed board of directors, comprised of certain outside directors, was created to review and assess information with respect to the Fox case and its impact on the proposed business combination of QualMed and HNMH. Following completion of its review and assessment of the Fox case, the Special Committee recommended to the QualMed board of directors earlier today that, notwithstanding the jury verdicts, QualMed should consummate the business combination with HNMH as soon as practicable on the terms previously announced. The Special Committee based its recommendation, in part, on a report of special litigation counsel retained by the committee to review the Fox case and an opinion of Salomon Brothers as to the fairness of the exchange ratio in the business combination to the stockholders of QualMed from a financial point of view. The board of directors of QualMed unanimously accepted the Special Committee's recommendation and unanimously recommended that stockholders of QualMed vote to approve the business combination.
 Thomas T. Farley, a director of QualMed and chairman of the Special Committee stated: "The Special Committee arrived at its recommendation following extensive review and assessment of the Fox case, including review of the case by special litigation counsel retained by the Special Committee and a review of the possible financial impact of the case by QualMed's financial advisors. The Special Committee concluded that the transaction remains in the best interest of QualMed and its stockholders, notwithstanding the jury verdicts in the Fox case."
 Malik M. Hasan, M.D., QualMed's chairman of the board of directors, president and chief executive officer, stated that "QualMed is very supportive of Health Net's position in the Fox case. While we were sad to review the facts of the case, which is a human tragedy for the Fox family, we believe that Health Net acted appropriately and in a principled fashion." He noted that Health Net offered to pay for the treatment in question based on the outcome of a second opinion evaluation by City of Hope hospital medical staff, and that "Health Net's offer of a second opinion would not have caused any appreciable delay in treatment." He added that "reports that Health Net's medical managers received a financial bonus from denying the treatment are misleading."
 Finally, Hasan stated that "it is quite important from a medical perspective that the evidence shows that prior to making its decision, Health Net spoke with perhaps the preeminent medical expert for this treatment in the U.S., Dr. William Peters of Duke University," who advised that the patient "was not an appropriate candidate."
 As previously announced, QualMed has signed a definitive merger agreement with HNMH. Consummation of the business combination is subject to satisfaction of certain conditions, including approval by stockholders of QualMed and receipt of required regulatory approvals.
 -0- 1/11/94
 /CONTACT: George Evans, director, Investor Relations of QualMed, 719-542-0500/
 (MQ)


CO: QualMed Inc.; HN Management Holdings Inc. ST: Colorado IN: HEA SU: TNM

LS-JB -- LA036 -- 1204 01/11/94 22:14 EST
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Publication:PR Newswire
Date:Jan 11, 1994
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