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Abbey Healthcare Ousts Executive Allies of Fired President : Management: Action represents an escalation of company’s battle with Victor Chaltiel, whom it accuses of misrepresentation.

TIMES STAFF WRITER

The battle between Abbey Healthcare Group Inc. and its former president, Victor M.G. Chaltiel, escalated Monday when the Costa Mesa nursing-home operator revealed that it has fired several executives who were part of Chaltiel’s management team.

Abbey officials would not identify the executives. Several industry analysts said they were probably people in financial management posts within Abbey and its Total Pharmaceutical Care subsidiary.

Chaltiel headed Torrance-based Total Pharmaceutical when it was acquired by Abbey last year. He became Abbey’s president as part of the deal.

Abbey fired Chaltiel in January without public explanation but said in April, after Chaltiel filed a wrongful-termination lawsuit, that he was dismissed for inflating Total’s earnings projections and for concealing other financial matters to promote Abbey’s purchase of the company.

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On Monday, responding to what it said was Chaltiel’s “insistence that Abbey is engaged in defamation,” Abbey’s board of directors repeated the company’s allegations--contained in a July 5 countersuit--that Chaltiel “knowingly misrepresented various matters which were material in Abbey’s decision” to acquire Total.

Monday’s statement continued, “Abbey has concluded that it was necessary to remove certain other members of his former management team from their positions, including certain (Total Pharmaceutical Care) officers who were terminated for cause.”

Abbey’s common stock has dropped 47% since Feb. 9, when Chaltiel was fired. In Monday’s Nasdaq trading, the company’s shares closed at $15.375, down 12.5 cents.

Since Chaltiel filed suit in April and gave investors a look at the financial problems the company faces, several industry analysts have published reports maintaining that Abbey spent far too much when it paid $197 million for Total.

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In May, Abbey reported a first-quarter loss of $6 million, contrasted with a $3-million profit for the same period a year earlier. The company blamed the loss on a $10.4-million write-off of costs related to acquisitions and restructuring--including executive severance pay packages. Chaltiel received $1.2 million when he was fired.


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