IN RE U.S. PHYSICIANS, INC.

Bankruptcy No. 98-34011DAS.

238 B.R. 103 (1999)

In re U.S. PHYSICIANS, INC., (Jointly Administered with U.S. Medical Services of Pennsylvania, P.C., U.S. Medical Services of New Jersey, P.C., U.S. Rehabilitation Services of Pennsylvania, P.C., U.S. Medical Services of Delaware, P.A.), Debtors. Orthopaedic Surgery and Sports Medicine, P.C., Orthopaedic Surgery & Sports Medicine Group, P.C., Lewis S. Sharps, M.D., Karl Rosenfeld, M.D., Plaintiffs, v. U.S. Physicians, Inc., U.S. Medical Services of Pennsylvania, P.C., U.S. Rehabilitation Service of Pennsylvania, P.C., U.S. Medical Services of Delaware, P.A., Christine C. Shubert, Trustee, Independence Blue Cross, Keystone Health Plan East, Personal Choice, Aetna/U.S. Healthcare, First State Health, Pennsylvania Blue Shield, Delaware Care, Donna Shalala, Secretary of the United States Department of Health and Human Service [Health Care Financing Administration, and Xact Medicare], Defendants.

United States Bankruptcy Court, E.D. Pennsylvania, Philadelphia Division.

August 24, 1999.


Attorney(s) appearing for the Case

Gary M. Schildhorn, Adelman, Lavine, Gold and Levin, Philadelphia, PA, for Debtors.

Daniel M. Grauman, Bala Cynwyd, PA, Trustee in U.S. Physicians, Inc. Case.

Christine C. Shubert, Tabernacle, NJ, Trustee on Other Debtors' Cases.

Morton Branzburg, Klehr, Harrison, Harvey, Branzburg & Ellers, Philadelphia, PA, for Trustee Daniel M. Grauman.

Paul B. Maschmeyer, Ciardi, Maschmeyer & Karalis, PC, Philadelphia, PA, for Trustee Christine Shubert.

Walter Weir, Jr., Bonnie R. Golub, Weir & Partners LLP, Philadelphia, PA, for Plaintiffs.

Henry DeWerth-Jaffe, Pepper Hamilton & Scheetz, Philadelphia, PA, for HCFP Funding, Inc.

Michael Migliaccio, Morgan, Lewis & Bockius LLP, Philadelphia, PA, for Independence Blue Cross, Keystone Health Plan East, and Personal Choice.

K. Tia Burke, Christie, Pabarue, Mortensen & Young, PC, Philadelphia, PA, for Pennsylvania Blue Shield.

James Matour, Middleman & Matour, PC, Philadelphia, PA, for Aetna/US Healthcare.

Brenda Pierce, Christiana Care Health Services, Wilmington Hospital, Washington, DE, for First State Health.

Mark Felger, Cozen & O'Connor, Philadelphia, PA, for Delaware Care.

Virginia R. Powel, Ass't. U.S. Attorney, Philadelphia, PA, for Donna Shalala.

Frederic Baker, Ass't. U.S. Trustee, Philadelphia, PA, United States Trustee.


OPINION

DAVID A. SCHOLL, Bankruptcy Judge.

A. INTRODUCTION

The instant adversary proceeding ("the Proceeding"), which originally asserted many claims against numerous parties, has boiled down to another in the series of attempts of former member physicians to separate themselves from the affiliated Debtors upon the failure of the Debtors' effort to form a large consolidated medical practice group in order that these physicians can collect...

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