Rival Bidder Sues Over MedPartners’ Sale Plan

MedPartners Inc.’s plan to sell its California physician practice management business, which provides care to 460,000 patients, was challenged by a rival bidder, MedManagement Acquisitions Corp., which claims it already had an agreement to buy the business. MedManagement has filed a lawsuit seeking a temporary restraining order to halt the sale of the business to KPC Global Care Inc. of Riverside, a privately held company. The suit was filed in Los Angeles County Superior Court. Shares of MedPartners, based in Birmingham, Ala., fell 44 cents to close at $6.88 on the NYSE. MedManagement is an investment group formed in April 1998. It was organized by several physicians to acquire the assets being sold to KPC, including Mullikin Practice Group, Southern California Medical Corp. and Friendly Hills Healthcare Network, according to the suit. MedPartners said that the suit lacks merit and that it will “vigorously contest” the case in court. The company added that it complied with the letter of intent and that Los Angeles-based MedManagement couldn’t get a transaction done by its May 14 expiration. MedPartners was once the largest U.S. manager of physician-group practices. In March, California seized its operations in the state and placed them under Chapter 11 bankruptcy protection.