It’s 2018 Now....
Update: 8/14/2015
CYH announced the 2Q15 earning and they had this to say about CYHHZ.. The company effective put the value of CYH at zero. However, if I look at the accounting of the value of CYH according to the company, the big $ jump out is the "Estimated liability of unresolved contingency at fair value" at $271M. So far the spending to date is Legal 26M + Settlement 19 + 2 estimated liability for probabale contingency or a total of 47M - 18m (deductible) - 2.5 (10% coinsurance)= $26.5M. The value of CYHHZ lie in what the company know about "estimated liability" vs "probable liability"? CYHHZ is set up to pay for the liability for 7 specific lawsuits. And we already has some settlement (a indicated in the 19M in settlement charge) and others that is going forward to settlement ("probable contingency). And the interesting part of the discussion is that there are 2 classes of estimations: "probable liability" vs "estimated liability". In my thinking "probable liability" is payment that is under discussion and company has clear indication of how much it will be (or at least an upperbound of the payment). "Estimated liability" is just a bucket that CYH set up for the remaining of lawsuits. The value of "estimated liability" is chosen so that it does not raise expectation of HMA owners who own this CVR and also not too high to make CYH owner upset as they are on the hook for any amount over the CVR value. To me, it is a number set up to not offending any group.
It is somewhat encouraging that after 1 1/2 years+, the case is still going on. That means (to me anyway), that government does not have a slam dunk case and CYH did not sell out HMA owner and just went for a quick settlement. CYH has settled some of it's cases for 98.5M. So CYH is not avert to a settlement if they choose.
I guess I am going to wait patiently to see how this one is going to resolve. The fact that majority of the money for the CVR is still unspent about a year and a half is a decent sign that the shareholders may get something at the end (figure cross and say "pretty please" 3 times quick 8-))..
CYH 2Q15 earning
As ofJune 30,2015
Legal and other related costs incurred to date $26
Settlements 19
Estimated liability for probable contingencies 2
Estimated liability for unresolved contingencies at fair value 271
Costs incurred plus certain estimated liabilities for CVR-related matters
318
Less:
CHS deductible of $18 million(18)
CHS co-insurance at 10% (30)
Impact of recorded amounts under CVR agreement after giving effect to deductible and co-insurance
$270
CVRs outstanding 265
