The dispute dates to July 2007, when NightHawk acquired Midwest Physician Services, the business services division of St. Paul Radiology of St. Paul, MN, and Emergency Radiology Services, an off-hours teleradiology services division of the radiology group.
As part of the deal, St. Paul Radiology signed a deal for long-term services with NightHawk, but in the fall of 2009 the group accused NightHawk of breach of contract and sought to terminate the relationship. NightHawk denied the charges.
To settle the dispute, NightHawk said that it sold to a third party its ownership interests in Midwest Physician Services and Emergency Radiology Services.
Also as part of the settlement, NightHawk will receive a payment of $26 million, $12 million of which NightHawk received at closing and $14 million of which will be paid to NightHawk over the next four years. In addition, NightHawk expects to realize tax savings of approximately $10 million related to the settlement, for a total expected value of the settlement of approximately $36 million over four years, the company said.
In addition, NightHawk has agreed to pay its lenders under its credit agreement a principal repayment of $26 million. Also, as part of the deal, NightHawk has agreed to make an additional principal repayment of $10 million by June 30, 2011, for a total expected principal repayment of $36 million.
Related Reading
NightHawk to close offices, cut 35 workers, June 22, 2010
NightHawk issues policy on 'predatory' telerad, May 19, 2010
NightHawk partners with Swiss firm, April 13, 2010
NightHawk moves to Ariz.., March 16, 2010
NightHawk hit with shareholder suit, December 21, 2009
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