Medical Resources reshapes management

Imaging services chain Medical Resources has made a number of moves to strengthen its management team. The company named Lawrence Ramaekers to its previously vacant post of CEO and has also begun a review of its related-party transactions in response to concerns from shareholders and members of senior management.

Ramaekers, who will serve as acting CEO, is a principal at management consulting firm Jay Alix & Associates and specializes in interim management assignments. He has previously worked as CEO at national restaurant chain Family Restaurants, and as COO of National Car Rental.

The investigation of the company's related-party transactions will focus principally on fees for investment banking, advisory, and other services paid to 712 Advisory Services, an affiliate of Medical Resources chairman Gary Siegler. In addition to assessing the manner by which the company considers related-party transactions, the review will examine the fairness of all such transactions and the adequacy of their disclosure. The review will also develop recommendations on what changes, if any, should be made to the company's procedures.

In the quarter ended September 30, 712 Advisory Services received around $1 million for services rendered involving six different acquisitions with an aggregate transaction value of approximately $33 million, according to Medical Resources. All earlier payments to 712 have previously been reported on a timely basis, according to the firm. Siegler and 712 believe that all of its financial advisory fees are and were proper, but will nevertheless abide by the findings of the independent review, according to the company.

Medical Resources has retained outside counsel to investigate the 712 transactions. A committee of directors formed by the board will initially oversee the review, although two new directors who will soon be added to the board will assume ultimate responsibility for the review.