Tom Phillips aborts major sale, citing contract failure.

Phillips International Inc. chairman Thomas L. Phillips has terminated the contract to sell Phillips Health Group to Your Health Inc. because of "the failure of Your Health Inc. to make cash payments under the contract on a timely basis."

After months of negotiation, PII signed a contract on March 30 to sell its health-related newsletters, web sites, and nutritional supplements to Your Health, a New York-based, privately held company founded and majority-owned by Mark Fox through The Fox Group. Terms of the deal were not disclosed, but Phillips stated, "Under the contract, Your Health Inc. was to put $10 million into an escrow account within three days. The full amount never arrived, in spite of two deadline extensions granted by Phillips International. On April 13 at 2:40 p.m., chairman Tom Phillips formally terminated the agreement due to breach of contract by Your Health Inc."

Phillips said that the Health Group will remain an integral part of the company. "Our health business has achieved 20 percent growth so far this year," Phillips said. "We have the people and resources to thrive in the health marketplace, and we are already effectively using the internet to expand our business beyond traditional channels."

Phillips International, one of the leading specialized information publishers in America, has annual revenues of $350 million.