July 30 Medical billing services provider
Accretive Health Inc said it would voluntarily wind down
its operations in Minnesota to settle a six-month-old lawsuit
brought against it by the state's attorney general alleging
violations of patient privacy.
The company's shares, which have slumped 62 percent since
the lawsuit was filed, rose 20 percent on news of the settlement
after the bell on Monday. They closed at $10.01 on the New York
The company did not admit to any wrongdoing alleged in the
complaint and said it does not expect the settlement to have a
material adverse effect on its financial condition.
The settlement includes a payment of about $2.5 million and
potential restrictions on future Minnesota operations if the
company plans to resume operations in the state.
Accretive Health estimated its adjusted earnings before
income tax, depreciation and amortization (EBITDA) for the
April-June period to be "significantly lower" than in the
year-ago period, citing higher operating costs related to ending
the Minnesota operations and the lawsuit.
The company, which is expected to report second-quarter
results on Aug. 8, posted adjusted EBITDA of $20.7 million in
the year-ago quarter.
As of Monday, the combined projected contracted annual
revenue run-rate for the Minnesota operations was between $23
million and $25 million, the Chicago-based company said in a