MINNEAPOLIS, Aug. 15, 2007 LAWFUEL – The Legal Newswire — Charles H. Johnson & Associates announces that a class action has been commenced in the United States District Court for the Middle District of Florida on behalf of purchasers of Health Management Associates, Inc. (“Health Management” or the “Company”) (NYSE:HMA) publicly traded securities during the period January 17, 2007 through July 30, 2007 (the “Class Period).
If you are a member of the proposed Class, you may move the court to serve as a lead plaintiff for the Class on or before October 1, 2007.
You do not need to be a lead plaintiff in order to share in any recovery that may be obtained.
The Complaint alleges that Defendants violated the federal securities laws by issuing a series of material misrepresentations during the Class Period thereby artificially inflating the price of Health Management securities. The Complaint alleges that Defendants engaged in a scheme to manipulate Health Management’s policies in order to create the impression that the Company had its “bad debt expenses” under control in order to borrow additional money, and to get the Board to approve of their recapitalization plan. On January 17, 2007, Health Management announced a major recapitalization which was completed in March 2007 and which required the Company to borrow $3.25 billion of new debt to refinance existing debt and pay shareholders a special one-time cash dividend of $10.00. The individual Defendants benefited substantially from this one-time dividend, given that they were major shareholders and each Defendant received large sums of money.
On July 31, 2007, Health Management announced that for its second quarter of 2007 it took a $39 million charge, and recorded it as an additional reserve to reflect a decline in collectibility of accounts receivable from uninsured patients. The Company updated its fiscal 2007 diluted EPS from continuing operations objective range to be between
$0.45 and $0.50 to reflect increased uninsured volumes, a deterioration in the collectibility of accounts receivable related to those uninsured volumes, and lower than anticipated overall paying volumes. On this news, Health Management stock dropped almost 25% to close at $8.06 on July 31, 2007.
If you purchased Health Management Associates, Inc. securities during the Class Period, or have any questions concerning this notice or your rights with respect to this matter, please contact:List your legal jobs on the LawFuel Network