News in brief - June 16, 2003

Canadian company wants Magellan - Investors in NCFE sue its bankers - Urologix CEO steps down - Nephrology company names new head

Canadian company wants Magellan

Toronto-based Onex Corp. has agreed to acquire a controlling interest in Magellan Health Services Inc., the U.S. behavioral health insurer that filed for Chapter 11 bankruptcy reorganization in March.

Onex's plan, which is subject to the approval of a U.S. bankruptcy judge, is to invest up to $275 million to help rebuild the Columbia, Md.-based insurer. Magellan provides or administers psychological and psychiatric care to 63 million people, either directly or through carve-outs from managed care plans.

Onex said in a news release that Magellan represents an "exciting opportunity" and that the company's reorganization plan is expected to be made final by the court by early fall. The Canadian conglomerate, with revenues of $23 billion a year, has holdings that include technology companies, sugar processing firms, automotive systems design and manufacturing companies, and movie theater giant Loews Cineplex Entertainment Corp.

Investors in NCFE sue its bankers

More than 20 banks and financial companies associated with Ohio-based National Century Financial Enterprises Inc., the now-defunct receivables financing firm that once funded scores of hospital emergency department staffs, clinics, nursing homes and other health care companies, are the target of a lawsuit filed last month by nearly 200 institutional investors trying to get some of their money back.

The plaintiffs are asking for more than $1.3 billion for money lost because of purchases of NCFE notes through investment pools, according to the Associated Press. Half of the plaintiffs are cities, counties, public pension funds and other government-related entities in Arizona. The lawsuit was filed in Maricopa County Superior Court.

NCFE, which filed for Chapter 11 protection in 2002 and is now under federal investigation for fraud, was not named as a defendant.

Urologix CEO steps down

Urologix Inc., the Minneapolis-based manufacturer of minimally invasive devices for the treatment of urological disorders, announced last month the resignation of its CEO. The company also plans to cut 28 positions, about 26% of its work force.

Michael M. Selzer, Jr., stepped down as the CEO and was replaced by Fred B. Parks, who also will become the company's board chair. Urologix expects to take a charge in the fourth quarter to cover severance pay and expenses related to the reduction.

Nephrology company names new head

National Nephrology Associates Inc., a Nashville, Tenn.-based chain of dialysis facilities, named Michael N. Cannizzaro as its new chair and CEO last month, replacing Jerome S. Tannenbaum, MD, who served in those positions since the company's founding five years ago. Dr. Tannenbaum told The Tennessean newspaper he planned to start a chain of plastic surgery hospitals.

National Nephrology Associates Inc. operates more than 80 facilities in 15 states and provides dialysis services in about 50 hospitals.