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Case Status:    SETTLED
On or around 08/15/2002 (Date of order of final judgment)

Filing Date: October 23, 1998

On August 15, 2002, the Court entered the Order and Final Judgment by U.S. District William J. Haynes Jr. approving the settlement and dismissing claims with prejudice. The plaintiffs were awarded attorney fees and the case was terminated. Earlier, on November 9, 2000, Judge Haynes granted the motion to dismiss the consolidated amended complaint as to certain Individual Defendants and denied the motion as to defendants Quorum Health Corporation and the remaining Individual Defendant.

The complaint charges Quorum and others with violations of sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that defendants issued false and misleading press releases and reports for each of the fiscal years ended June 30, 1998, 1997 and 1996, and for each of the fiscal quarters therein, because the net accounts receivable, net operating revenue, net patient services revenue, net income and net income per common share disclosed in those press releases and reports were materially overstated. The overstatements are alleged to have resulted from a company-wide scheme that has been ongoing since at least 1984 by which Quorum filed false reimbursement claims with Medicare and Medicaid. Quorum's scheme recently came to light when it disclosed that, after a six year investigation into Quorum's cost reporting practices, the federal government had intervened in a Civil False Claims Act lawsuit against Quorum.

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