Imaging firms send dispute to arbitration

Imaging services firms MedAlliance and Health Images have chosenarbitration to settle their dispute over the size of an earnoutpayment related to HI's acquisition of 15 MedAlliance imagingcenters (SCAN 7/19/95). Atlanta-based Health Images and MedAlliance,of Brentwood, TN, disagree over whether HI owes the full earnoutamount of $8.25 million, which is based on the performance ofthe centers in the first three months of 1995.

HI believes that it does not owe the payment and that MedAllianceshould pay $5 million as an adjustment for the purchase priceof the centers. HI said it is due the payment because of liabilitiesit assumed that were not agreed upon in the acquisition contract.Accounting and consulting firm Arthur Andersen & Co. willarbitrate the dispute.

MedAlliance announced last month that it has entered into abinding agreement to sell all its remaining assets to NationalMedical Care. The sale is subject to several conditions and MedAlliancehopes to hold a shareholders meeting in September to discuss thetransaction.