Dr. Steven M. Scott , Remember who he is? What a VICIOUS Circle!

Federal Bankruptcy Court Finds Dr. Steven M. Scott in Contempt.
Publication: Business Wire
Date: Friday, January 23 2004

Publication: Business Wire
Date: Friday, January 23 2004
MIAMI--(BUSINESS WIRE)--Jan. 23, 2004
PhyAmerica announced today that on January 21, 2004, the Federal Bankruptcy Court in Baltimore, Maryland held Dr. Steven M. Scott in contempt of court due to Dr. Scott's violations of a Preliminary Injunction. The Preliminary Injunction, issued by the Court on December 19, 2003, prohibits Dr. Scott, for one year or further order from the Bankruptcy Court, from: (1) meeting with current employees and/or affiliates of PhyAmerica and from making any representations or statements concerning the former, current or future operations of PhyAmerica; (2) communicating with any party to a Provider Contract or any Provider about the operations of PhyAmerica; and (3) taking any further actions to procure, service, impair or otherwise interfere with the North Broward District contracts and the relationship between the North Broward District and PhyAmerica.

The Court held that there were at least two instances where Dr. Scott had acted in violation of the Preliminary Injunction and announced that the determination of actual damages caused by these violations would occur at a hearing to be scheduled in the future. The Court also imposed a $50,000 per incident sanction for any further contempt on Dr. Scott's behalf. The Court's decision was issued after two days of hearings, during which the Court found that there was "clear and convincing evidence" of Dr. Scott's violations of the Preliminary Injunction.

The Preliminary Injunction was issued by the Court in response to a Motion for Temporary Restraining Order and Preliminary and Permanent Injunction filed by the Official Committee of Unsecured Creditors and NCFE, PhyAmerica's largest creditor. In the Motion, the Committee and NCFE alleged that Dr. Scott interfered with PhyAmerica's efforts to reorganize and consummate the sale of PhyAmerica's assets to R.D. PhyAm Acquisition Corporation ("RDA") previously approved by the Court.

PhyAmerica anticipates that the closing of the sale to RDA will be completed by the end of January.