ADPI American Dental Partners, Inc. (MM)

MINNEAPOLIS, March 3 /PRNewswire/ -- Park Dental, a Twin Cities area group dental practice that has been a mainstay in the Minnesota Dental community for 40-years, announced today that it has completed a deal under which it is separating its practice from its Boston, Massachusetts-based administrative services provider, American Dental Partners, Inc. (NASDAQ:ADPI). The separation is the result of the settlement of a lawsuit in which the doctors of Park Dental and a related group called the Dental Specialists recently obtained a jury award of over $130 million against ADPI and ADPI's Minnesota-based subsidiary, PDHC, Ltd. Beginning in 2006, the Park Dental doctors sued ADPI and PDHC, which owned the rights to the 31 clinic locations out of which the Park Dental doctors operated and also employed the support staff that worked with the dentists. The dental group, which operates the Park Dental and The Dental Specialists clinics in the Twin Cities, alleged that ADPI and PDHC had overstepped their authority under the Minnesota law requiring that licensed dentists be responsible for all aspects of the practice of dentistry, and argued ADPI and PDHC breached other contractual and fiduciary obligations to the doctor group. Following a month long trial in late 2007, a Hennepin County, Minnesota jury sided with the dentists, awarding the doctor group more than $130 million, including $88 million in compensatory damages and $42 million in punitive damages. A recent report published in The National Law Journal and Verdict Search identified this verdict No. 11 on the list of the Top 100 largest jury verdicts nationally in 2007. Following the verdict, the parties entered into negotiations that ultimately led to a settlement agreement signed on February 29, under which the Park Dental doctor group took back rights to 25 of the 31 Park Dental and Dental Specialist clinic spaces in the Twin Cities area. Once the settlement is fully implemented, Park Dental, the first and largest dental group to ever affiliate with ADPI, will have no further relationship with ADPI. Instead, Park Dental will directly employ all of the support staff previously employed by the service provider and the dental practice will be wholly owned and operated by its doctors. As for the six clinics that were not transferred to the doctor group, Boston-based ADPI has entered into affiliation with a different dental group that will operate in those locations under a different name. Park Dental is in the final stages of replacing those locations with nearby clinic spaces to serve its patients in those areas. In addition to closing on the separation deal, Park Dental last week secured, on favorable terms, long-term financing needed to complete this transition. Dr. John Gulon, the President of the Park Dental doctor group (called PDG, P.A.), said that he and his colleagues are excited to move forward with their dental practices without a continued long-term relationship with ADPI. "Winning the lawsuit and then reaching a settlement that allows our dentists to continue the Park Dental practices while separating from ADPI was a long journey, but well worth the effort," according to Gulon. Gulon stated, "this will allow us to continue to pursue our passion and professional commitment to outstanding patient care that is second to none." Dr. Alan Law, President of The Dental Specialist agreed. Law stated that the lawsuit and implementation of the settlement will allow the doctor group to accomplish its goal of uninterrupted, top quality care to its patients. "That can now be accomplished with all of the Park Dental and Dental Specialists staff being part of the same team. Now the doctors don't have to work with an administrative group we had developed significant disagreements with," according to Law. Dr. Gulon also noted that this transaction brought Park Dental "back to the future." Prior to its 1996 affiliation with ADPI, the Park Dental Group independently ran the clinics and employed all of its staff. "That is how we prefer to operate our clinics and that is how we will run them in the future," Gulon said. The dental group was represented in the litigation by Joseph Anthony and Randy Gullickson of the law firm Anthony Ostlund Baer Louwagie & Ross. Anthony noted that, "We are very pleased with the successful trial and subsequent settlement. We were able to meet our clients' objectives, which was to allow the Park Dental doctors to continue to focus on the high level of care for which they have become known for over the last forty years," Gullickson said. "They never wavered in their commitment to their patients and their profession." For more information, contact Joseph Anthony or Randy Gullickson at Anthony Ostlund Baer Louwagie & Ross, 612-349-6969 DATASOURCE: Anthony Ostlund Baer Louwagie & Ross CONTACT: Joseph Anthony, or Randy Gullickson, both of Anthony Ostlund Baer Louwagie & Ross, +1-612-349-6969

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