Product details

Following an announcement of Total Renal Care''s preliminary results for the 4th quarter of 1998, including the full years financial results, several class action lawsuits were filed against the company and several corporate officers in California. The complaints allege that the company booked revenues at inflated amounts, failed to disclose that a material portion of the company''s accounts receivable was not collectable, reported excessive non-Medicare revenues, billed for treatments that were never performed, failed to disclose accurately the basis for suspension of payments to the company''s Florida based laboratory subsidiary on Medicare claims, and how the company accounted for goodwill to overstate income. Total Renal Care has since corrected the problem. However, as a result of these corrections, the company is presently out of compliance with several financial covenants resulting in higher interest charges. One additional consequence of this failure to meet the credit covenants is that a majority of the company''s lenders could declare an event default thus accelerating the payment of all amounts due under the credit agreements. As a result, the company has reclassified some of the long-term debt balances to current liabilities on the balance sheet.