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MEDCASH FINANCIAL AND LEONA ENTERPRISES NAMED AS DEFENDANTS

 MEDCASH FINANCIAL AND LEONA ENTERPRISES NAMED AS DEFENDANTS
 RIVER VALE, N.J., Feb. 25 /PRNewswire/ -- The following was released


today by Milan National Corp., subsidiary of Leona Enterprises Inc.:
 "Medcash Financial Corporation and its parent company, Leona Enterprises, Inc., announced today that they have been named as defendants in an action brought by Health Line, Inc., a wholly owned subsidiary of Blue Cross Blue Shield of Maryland ('Blue Cross/Blue Shield'), in the Federal District Court of Maryland. The action alleges that Medcash Financial and Leona breached an asset purchase agreement pursuant to which Medcash Financial was to acquire the business and substantially all of the assets of Health Line. Medcash Financial and Leona deny the allegations and will vigorously defend the action.
 "Leona had previously announced that Medcash Financial would purchase the business and certain assets of Health Line, a company which offers a dedicated line of credit in the form of a credit card for consumers to use to pay for health-care related expenses. Medcash was formed to acquire Health Line. During a due diligence review of Health Line's business and financial condition, however, Medcash Financial and Leona concluded that Health Line's accounts receivable did not reflect the actual amount realizable. A substantial portion of Health Line's accounts receivable arise from the use of the credit card to charge karate classes and diet center membership fees. Medcash Financial believes that such charges ordinarily result in high risk receivables.
 "Medcash Financial and Leona, the guarantor of Medcash Financial's obligations under the asset purchase agreement, intend to explore all legal remedies available to them, including the possibility of counterclaims against Health Line and third-party claims against Blue Cross/Blue Shield. Medcash Financial and Leona stand ready, willing and able to perform a counteroffer to bifurcate the closing by currently consummating the purchase of Health Line's business and, subsequently, upon the conclusion of an independent audit to determine the realizable value of the accounts receivable, purchasing the accounts receivable at such realizable value."
 -0- 2/25/92
 /CONTACT: Milan National public relations, 201-666-3330/ CO: Medcash Financial Corporation; Leona Enterprises, Inc.;
 Health Line, Inc. ST: New Jersey, Maryland IN: SU:


GK-OS -- NY039 -- 2306 02/25/92 11:37 EST
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No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Publication:PR Newswire
Date:Feb 25, 1992
Words:367
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