Horizon Healthcare Corp. Files Answer and Counterclaims in Litigation with The Hillhaven Corp.

Albuquerque-based Horizon Healthcare Corp. has taken a bold step in its ongoing legal dispute with Tacoma-based The Hillhaven Corp. Filing an answer and counterclaims in the United States District Court for the District of Nevada, Horizon is accusing Hillhaven's directors of breaching their fiduciary duties in connection with the rejection of a merger proposal made by Horizon. The proposed merger, initially suggested in January 1995, would have seen Hillhaven shareholders receive $28 in stock for each of their shares.

Key Takeaways:

• Horizon Healthcare Corp. has filed an answer and counterclaims in the United States District Court for the District of Nevada against The Hillhaven Corp.
• The counterclaims allege that certain of Hillhaven's directors breached their fiduciary duties in connection with the rejection of a merger proposal made by Horizon.
• The proposed merger, initially suggested in January 1995, would have seen Hillhaven shareholders receive $28 in stock for each of their shares.
• Horizon's answer and counterclaims seek injunctive relief and damages from Hillhaven and certain of its directors.
• The dispute is ongoing, with no resolution in sight.
• Horizon's chairman and CEO, Neal M. Elliott, expressed regret over the necessity of asserting claims against Hillhaven's directors.
• Horizon Healthcare Corp. is a leading provider of specialty healthcare services and long-term nursing care, operating 16 licensed specialty hospitals and 129 long-term care centers across 18 states.
• The company provides institutional pharmacy services to over 34,700 beds across 16 states and contract rehabilitation therapy services through 380 contracts in 20 states.

Statistics:

• 16 licensed specialty hospitals and specialty centers operated by Horizon Healthcare Corp.
• 129 long-term care centers operated by Horizon Healthcare Corp. across 18 states.
• Total in-patient operating units totals 160.
• Total beds across all operating units is 17,384.
• Institutional pharmacy services provided to over 34,700 beds across 16 states.
• Contract rehabilitation therapy services provided through 380 contracts in 20 states, serving approximately 37,000 beds.

Sources:

• Horizon Healthcare Corp. press release, February 27, 1995.
• The Hillhaven Corp. (NYSE: HIL) press release, January 25, 1995.