IN THE UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
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:
ISSAC KAHAN On Behalf of :
Himself And All Others Similarly Situated, : 3-98-1004
Plaintiff, : : CLASS ACTION COMPLAINT
v. : FOR VIOLATIONS OF THE
: FEDERAL SECURITIES LAWS
QUORUM HEALTH GROUP, INC., JAMES E. : [filed Oct. 23, 1998]
DALTON, JR., STEVE B. HEWITT, and :
EUGENE C. FLEMING, : Plaintiff Demands a
: Trial By Jury
Defendants. :
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All allegations made in this complaint are based on information and belief, except those
allegations that pertain to the named plaintiff and his counsel, which are based on
personal knowledge. Plaintiffs information and belief is based, inter alia, on the
investigation made by and through his attorneys.
JURISDICTION AND VENUE
1. This Court has jurisdiction over the subject matter of this action pursuant to Section 27
of the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. § 78aa. and 28
U.S.C. § 1331. The claims alleged herein arise under Sections 10(b) and 20(a) of the
Exchange Act. 15 U.S.C. §§ 78j(b) and 78t(a), and Rule 10b-5 promulgated thereunder,
17 C.F.R. § 240.10b-5.
2. Venue is proper in this District pursuant to Section 27 of the Exchange Act and 28
U.S.C. § 1391. Many of the acts and transactions giving rise to the violations of law
complained of herein, including the preparation and filing of materially false and
misleading annual and quarterly reports, occurred in this District. In addition, at all times
relevant hereto, defendant Quorum Health Group, Inc. ("Quorum" or the "Company")
maintained its principal executive offices in this District at 103 Continental Place,
Brentwood, Tennessee 37027.
3. In connection with the wrongful acts and conduct alleged herein, defendants, directly
and indirectly, used the means and instrumentalities of interstate commerce, including the
United States mail and the facilities of a national securities market.
THE PARTIES
SNIPPETS:
:: x All allegations made in this complaint are based on information and belief, except those
This Court has jurisdiction over the subject matter of this action pursuant to Section 27 of
Many of the acts and transactions giving rise to the violations of law complained of herein,
In addition, at all times relevant hereto, defendant Quorum Health Group, Inc. maintained its
In connection with the wrongful acts and conduct alleged herein, defendants, directly and
Plaintiff Issac Kahan purchased 50 shares of Quorum stock on September 29, 1998, at $16 per
During the Class Period, as defined in paragraph 11 below, Dalton sold 120,000 shares of
The Individual Defendants were each controlling persons of Quorum within the meaning of
Quorum's Dependence on Medicaid and Medicare
The Company's net patient service revenue, which was over $1.4 billion, $1.2 billion and $960
Substantially all of the Company's hospitals are currently certified as providers of benefits
Quorum receives reimbursement under a prospective payment system for the routine and
In a press release carried over PR Newswire, Quorum stated, among other things, that the
Quorum also disclosed net accounts receivable at September 30,
Defendant Dalton, the Company's President and Chief Executive Officer, declared that
he accompanying unaudited condensed consolidated financial statements have been prepared in
all adjustments considered necessary for a fair presentation have been included.
In the 1997 1st Quarter 10-Q, which was signed by defendant Hewett, Quorum reported, among
Net income per common share (on a diluted basis) for the six-month period increased by $0.10
The complaint was filed in December 1992 and has since been amended three times.
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