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news.American Dental Partners has entered into a settlement agreement with PDG with respect to the litigation filed in the District Court of Minnesota. The settlement agreement requires that the parties exercise all reasonable efforts to enter into definitive agreements on or prior to January 11, 2008.
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Under the terms of the settlement agreement, the company will transfer to PDG the leases and associated tangible assets with respect to 25 of 31 Park Dental facilities and various tradenames, including ‘Park Dental’. The company will retain six of the dental facilities and the resource group office, an administrative team of approximately 35 individuals that supports the Park Dental facilities. The parties have agreed that PDHC will provide interim management services to PDG for a period of up to nine months. PDG will pay PDHC a management fee of $19 million regardless of whether PDG utilizes the management services of PDHC during the nine month period. The company has also agreed to forgive outstanding accounts receivable due from PDG at December 31, 2007, which at September 30, 2007 were $3 million. Transfer of the facilities and associated assets is expected to occur by February 29, 2008.
The settlement is subject to the approval of the lenders under the company’s secured revolving credit agreement and term loan agreement and the company and its lenders entering into new or modified agreements on mutually satisfactory terms.
Gregory Serrao, chairman, CEO and president of American Dental Partners, said: “We disagree with the verdict and have considered our legal alternatives, including filing post-trial motions with the Court and potential appeals.”