Tuesday, December 28, 2004
Three venture capital firms that bought Healthcare Management Resources of Hendersonville, Tennessee, are suing the sellers for fraud and breach of contract. The firms claim the previous owners generated fictitious invoices that added $943,000 to earnings figures, which means that the $16.5 million purchase price was about $5 million too high.
The company has not prospered, and the VCs are asking for rescission of the purchase or, in the alternative, for compensatory and punitive damages. T hey are also seeking an injunction to prevent the defendants from spending the purchase money until the matter is resolved. A hearing is scheduled for January 6.