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MarketScreener Homepage  >  Equities  >  Nyse  >  Community Health Systems    CYH

COMMUNITY HEALTH SYSTEMS (CYH)
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COMMUNITY HEALTH SYSTEMS INC : Other Events (form 8-K)

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01/11/2019 | 04:04pm EST
ITEM 8.01 Other Events


Contingent Value Rights

As previously disclosed, on September 25, 2018, Community Health Systems, Inc. (the "Company") announced a global resolution and settlement agreements ending the U.S. Department of Justice investigations into certain conduct of Health Management Associates, Inc. ("HMA") and its affiliated entities and settling qui tam lawsuits that were initiated and pending, and known to the Company, before the Company's acquisition of HMA, under which resolution the Company made total payments of $266 million (including interest) during the fourth quarter of 2018. Based on the total costs incurred and settlements paid (including with respect to this global settlement), no payment will be due to the holders of the contingent value rights ("CVRs") that were issued to shareholders of HMA as part of the consideration in the Company's acquisition by merger of HMA in January 2014 and trade on the Nasdaq Global Market under the ticker symbol CYHHZ.

The Contingent Value Rights Agreement, dated January 27, 2014, by and between the Company and American Stock Transfer & Trust Company, LLC, as trustee (the "CVR Agreement"), entitled the holder to receive a one-time cash payment of up to $1.00 per CVR, subject to downward adjustment (but not below zero) based on the final resolution of certain litigation, investigations, or other actions or proceedings (the "HMA Legal Matters") related to HMA or its affiliates which existed on or prior to July 29, 2013 (the date of the Company's merger agreement with HMA). Based on the amount of losses incurred by the Company in connection with the HMA Legal Matters as more specifically provided in the CVR Agreement, which generally included the amount paid for damages, costs, fees and expenses (including, without limitation, attorneys' fees and expenses), and all fines, penalties, settlement amounts, indemnification obligations and other liabilities, no amount is payable to the holders of CVRs under the CVR Agreement. The Company has provided notice to the trustee under the CVR Agreement of this determination in accordance with the terms of the CVR Agreement.

As a result of the determination that no amount is payable under the CVRs, the CVR Agreement has terminated, and the CVRs will be removed from listing with Nasdaq and deregistered with the Securities and Exchange Commission.

Forward-Looking Statements

This Current Report on Form 8-K includes forward-looking statements that involve risk and uncertainties. Actual future events or results may differ materially from these statements. The Company undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

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© Edgar Online, source Glimpses

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