SEC Filings

AMSURG CORP filed this Form 10-12G/A on 05/21/1997
Entire Document
<PAGE>   19
operational, financial and management systems or to expand, train, motivate or
manage employees could have a material adverse effect on AmSurg's financial
condition and results of operation.
among other things, the efforts and success of the physicians who provide
medical services at the surgery centers or who are employed by AmSurg physician
practices and the strength of AmSurg's relationship with such physicians.
AmSurg's business could be adversely affected by any failure of these physicians
to maintain the quality of medical care or otherwise adhere to required
professional guidelines at AmSurg surgery centers and physician practices, any
damage to the reputation of a key physician or group of physicians, or the
impairment of AmSurg's relationship with a key physician or group of physicians.
AmSurg's ownership interests in practice-based ambulatory surgery centers and
specialty physician networks generally are structured through limited and
general partnerships or limited liability companies. AmSurg maintains a majority
interest in each partnership or limited liability company, with physicians or
physician practice groups holding minority limited partnership interests or
serving as minority members. AmSurg, as owner of majority interests in such
partnerships and limited liability companies, owes a fiduciary duty to the
minority interest holders in such entities and may encounter conflicts between
the respective interests of AmSurg and the minority holders. In such cases,
AmSurg's directors are obligated to exercise reasonable, good-faith judgment to
resolve the conflicts and may not be free to act solely in the best interest of
AmSurg. AmSurg, in its role as general partner or as the chief manager of the
limited liability company, generally exercises its discretion in managing the
business. Disputes may arise between AmSurg and its physician partners with
respect to a particular business decision or as to the interpretation of the
provisions of the partnership or limited liability company agreements, in which
event the agreements provide for arbitration as a dispute resolution process. No
assurances can be given that any such dispute will be resolved or if resolved
will be done so on terms satisfactory to AmSurg.
     In the limited partnerships in which AmSurg is the general partner, AmSurg
is liable for 100% of the debts and other obligations of the partnership;
however, the partnership agreement requires the physician partners to guarantee
their pro rata share of any indebtedness or lease agreements to which the
partnership is a party, based on the limited partner's ownership interest in the
partnership. AmSurg has similar liability with respect to the bank debt incurred
by the limited liability companies, and guarantees are also required of the
physician members. There can be no assurance that a third party lender or lessor
would seek performance of the guarantees rather than look to AmSurg for
repayment of any obligation of the partnership should it default thereunder or
that the physician partners would have sufficient assets to satisfy their
guarantee obligations. See "Notes to the Consolidated Financial Statements of
AmSurg -- Note 8."
     CONTINGENT REPURCHASE OBLIGATIONS.  Upon the occurrence of certain
fundamental regulatory changes, AmSurg will be obligated to purchase some or all
of the minority interests of the physicians affiliated with AmSurg in the
partnerships or limited liability companies which own and operate AmSurg's
surgery centers. The regulatory changes that could trigger such an obligation
include changes that: (i) make the referral of Medicare and other patients to
AmSurg's surgery centers by physicians affiliated with AmSurg illegal; (ii)
create the substantial likelihood that cash distributions from the partnership
or limited liability company to the physicians associated therewith will be
illegal; or (iii) cause the ownership by the physicians of interests in the
partnerships or limited liability companies to be illegal. There can be no
assurance that AmSurg's existing capital resources would be sufficient for it to
meet the obligation, if it arises, to purchase minority interests held by
physicians in the partnerships or limited liability companies which own and
operate AmSurg's surgery centers. The determination of whether a triggering
event has occurred is made by the concurrence of counsel for AmSurg and the
physician partners or, in the absence of such concurrence, by independent
counsel having an expertise in healthcare law and who is chosen by both parties.
Such determination is therefore not within the control of AmSurg. While AmSurg
has structured the repurchase obligations to be as favorable as possible to
AmSurg, the triggering of these obligations could have a material adverse effect
on the financial condition and results of operations of AmSurg. See "BUSINESS OF
AMSURG -- Acquisition and Development of Surgery Centers; and -- Government
approximately 10% of AmSurg's total revenues were derived from capitated payment
arrangements. A significant part of AmSurg's growth strategy involves assisting
its surgery centers, owned physician practices and specialty physician networks