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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): September 8, 2006
ORION HEALTHCORP, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 001-16587 58-1597246
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
1805 Old Alabama Road, Suite 350
Roswell, GA 30076
(Address of Principal Executive Offices) (Zip Code)
(678) 832-1800
(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Section 1 Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement
On July 12, 2005, Orion HealthCorp, Inc. ("the Company") was
named as a defendant in a suit entitled American International
Industries, Inc. ("AII") vs. Orion HealthCorp, Inc. (previously
known as SurgiCare, Inc.), Keith G. LeBlanc, Paul Cascio,
Brantley Capital Corporation, Brantley Venture Partners III,
L.P., Brantley Partners IV, L.P. (collectively, "the Named
Defendants") and UHY Mann Frankfort Stein & Lipp CPAs, LLP ("UHY
Mann") in the 80th Judicial District Court of Harris County,
Texas, Cause No. 2005-44326. The case involved allegations that
the Company made material and intentional misrepresentations
regarding the financial condition of the parties to the
acquisition and restructuring transactions effected on December
15, 2004 for the purpose of inducing AII to convert its SurgiCare
Class AA convertible preferred stock into shares of the Company's
Class A Common Stock. AII asserted that the value of its Class A
Common Stock of Orion had fallen as a direct result of the
alleged material misrepresentations by the Company. AII was
seeking an aggregate of $7,600,000 in damages (actual damages of
$3,800,000 and punitive damages of $3,800,000), and rescission of
the agreement to convert the SurgiCare Class AA convertible
preferred stock into Class A Common Stock.
On September 8, 2006, the Company entered into a Settlement
Agreement with a Joint and Mutual Release and Indemnity Agreement
(the "Settlement Agreement") in which the claims by AII against
the Named Defendants were fully settled as to all claims, with
complete mutual releases for all of the Named Defendants and AII.
Under the terms of the Settlement Agreement, AII will receive
$750,000, paid primarily by various insurance carriers of the
Named Defendants, on or before 45 days from the execution of the
Settlement Agreement. As part of the Settlement Agreement, the
Named Defendants vigorously denied any liability and AII
acknowledged the highly disputed nature of its claims against the
Named Defendants. Both the Named Defendants and AII acknowledged
that the Settlement Agreement was made as a compromise to avoid
further expense and to terminate for all time the controversy
underlying the lawsuit.
A copy of the Settlement Agreement is attached as Exhibit 10.1 to
this current report.
Item 7.01 Regulation FD Disclosure
On September 14, 2006, the Company issued a press release that it
had reached a settlement of the legal matter referenced in Item
1.01 above. The press release is attached as Exhibit 99.1 to this
current report.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits - The following exhibits are furnished as part of this current
report:
Exhibit Description
10.1 Settlement Agreement with a Joint and Mutual Release and
Indemnity Agreement, dated September 8, 2006, by and among
American International Industries, Inc., International
Diversified Corporation, Ltd. and Daniel Dror II as Claimants and
Orion HealthCorp, Inc., Brantley Capital Corporation, Brantley
Venture Partners III, L.P., Brantley Partners IV, L.P., Keith G.
LeBlanc and Paul Cascio as Defendants
99.1 Copy of press release issued by the Company on September 14,
2006.
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ORION HEALTHCORP, INC.
By: /s/ Stephen H. Murdock
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Stephen H. Murdock
Chief Financial Officer
Date: September 14, 2006
EXHIBIT INDEX
Exhibit
Number Description of Exhibits
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10.1 Settlement Agreement with a Joint and Mutual Release and
Indemnity Agreement, dated as of September 8, 2006, by and among
American International Industries, Inc., International
Diversified Corporation, Ltd. and Daniel Dror II as Claimants
and Orion HealthCorp, Inc., Brantley Capital Corporation,
Brantley Venture Partners III, L.P., BrantleyPartners IV, L.P.,
Keith G. LeBlanc and Paul Cascio as Defendants
99.1 Copy of press release issued by the Company on September 14,
2006.