8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934.

Date of Report (Date of earliest event reported): August 28, 2012

MEDCATH CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	000-33009	56-2248952
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification No.)

10720 Sikes Place

Charlotte, North Carolina 28277

(Address of principal executive offices, including zip code)

(704) 815-7700

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13d-4(c))

Item 3.03. Material Modifications to Rights of Security Holders.

Amendments to the Rights Agreement. On August 28, 2012, the board of directors of MedCath Corporation (the “Company” or “MedCath”) approved, and the Company and American Stock Transfer & Trust Company, LLC, as rights agent, (the “Rights Agent”) entered into, Amendment No. 1 to the Rights Agreement (the “Amendment”) as described further under Item 8.01 below. Capitalized terms used but not defined herein shall have the meanings set forth in the Rights Agreement, dated June 15, 2011, between the Company and the Rights Agent.

Item 8.01 Other Events.

The Pre-Filing Liquidating Distribution. The Company’s board of directors has determined that the conditions outlined in the Company’s proxy statement (the “Proxy”) filed with the United States Securities and Exchange Commission (the “SEC”) on August 17, 2011, to make an additional liquidating distribution prior to the Filing (as defined below), have been met. Accordingly, on August 28, 2012, the Company’s board of directors approved a pre-Filing liquidating distribution (the “Pre-Filing Liquidating Distribution”) to the holders of the Company’s outstanding shares of common stock, par value $.01 (the “Common Stock”), of $6.33 per share. The Company’s board of directors set September 10, 2012 as the record date and September 21, 2012 as the payable date for the Pre-Filing Liquidating Distribution. In accordance with NASDAQ Marketplace Rules, the ex-dividend date for the Pre-Filing Liquidating Distribution will not be before or on the date the Filing is made.

The Certificate of Dissolution Filing. On August 28, 2012, the Company’s board of directors also approved filing the Company’s certificate of dissolution with the Secretary of State of the State of Delaware (the “Filing”) on September 21, 2012 in accordance with Section 275 of the General Corporation Law of the State of Delaware (the “DGCL”) and the Plan of Dissolution of MedCath (the “Plan of Dissolution”). In accordance with the Company’s prior disclosures in the Proxy, this Form 8-K is being filed, in part, to provide at least 20 days advance notice to the Company’s stockholders of the date (September 21, 2012) that the Company intends to make the Filing.

Cessation of Trading on NASDAQ Global Select Market. Trading in the Common Stock on the NASDAQ Global Select Market will be suspended and cease after the regular market officially closes at 4 p.m. EDT on September 21, 2012. NASDAQ will file a Form 25 with the SEC to notify the SEC of its removal of the Common Stock from listing on the NASDAQ Global Select Market.

Closing of Stock Transfer Books. Upon the Filing, MedCath will close its stock transfer books and discontinue recording transfers of its Common Stock. After MedCath closes its stock transfer books, the Company will not record any further transfers of its Common Stock on its books except by will, intestate succession or operation of law. Therefore, shares of MedCath’s Common Stock will not be voluntarily transferable on its stock transfer books for transfers made after the Filing. All Post-Filing Distributions (as defined below) will be made to the Company’s stockholders of record as of the Filing (the “Dissolution Record Date”) on a pro rata basis.

The Holdback. The Company’s net assets in liquidation at June 30, 2012 under generally accepted accounting principles in the United States (“GAAP”) as reported on the Company’s Consolidated Statements of Net Assets in Liquidation in the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 9, 2012 (the “Third Quarter 10-Q”), which the Company’s board of directors relied upon in part in approving the Pre-Filing Liquidating Distribution, does not take into consideration any estimated range of potential unknown contingencies. However, based on prior history, the Company expects to incur contingencies during the wind-down period following the Filing that the Company cannot estimate in accordance with GAAP at this time. To provide a source of funds for payment of any such contingencies, the board of directors has determined, in connection with its approval of the Pre-Filing Liquidating Distribution, to hold back $48.0 million in cash, or $2.36 per common share, (the “Holdback”).

The Holdback will be used post-Filing during the wind-down period and in accordance with the DGCL to satisfy all of the Company’s contingent liabilities, including without limitation (i) any liabilities, the amount of which is currently unknown, arising out of the implantable cardioverter defribrillator (“ICD”) investigation by the Department of Justice (“DOJ”) described in Note 6 of the Notes to Unaudited Consolidated Financial Statements included in the Third Quarter 10-Q, which description is incorporated herein by reference, (ii) other currently unknown or unanticipated liabilities due to the government for unknown reimbursement claims, such as recovery audits (“RAC” audits), cost report settlements, and any other unknown contingent liabilities that may arise during the normal course of operations during the wind-down period, including legal claims and governmental investigations, as previously disclosed, and (iii) a reserve the board of directors has determined to be necessary or appropriate under the DGCL with respect to additional liabilities that may arise or be identified after the Filing. The Holdback is not intended to satisfy the Company’s recorded wind-down liabilities of approximately $23.8 million that have already been reflected on the Company’s Consolidated Statements of Net Assets in Liquidation as of June 30, 2012 included in the Company’s Third Quarter 10-Q.

In setting the amount of the Holdback, the board of directors did not take into consideration any potential tax benefits that may be realized by the Company during the wind-down period. These potential tax benefits include, but are not limited to, $8.0 million, or $0.39 per common share, realizable upon the timely recognition of certain losses, if there has not been a previous “ownership change” as defined in Section 382 of the Internal Revenue Code, as amended (the “Code”). On June 13, 2011, the Company entered into the Rights Agreement seeking to preserve for the Company’s stockholders the value or availability of certain of the Company’s tax

attributes. The Rights Agreement was amended on August 28, 2012 to (i) provide the Company’s board of directors the authority, in its sole and absolute discretion, to exempt any Person from being deemed an Acquiring Person under the Rights Agreement, (ii) permit the Company’s board of directors, in its sole and absolute discretion, to terminate the Rights Agreement and all of the Rights established thereunder at any time, and (iii) eliminate certain potential notice requirements under the Rights Agreement in connection with the dissolution of the Company. Should there nonetheless be an “ownership change” as defined in Section 382 of the Code, the expected refund of income taxes to the Company could be substantially reduced and the Company may lose the right to deduct losses incurred after the Filing that pertain to events that existed prior to the Filing (“Built-in-losses”), which losses could be significant. Built-in-losses would include any or all losses incurred in resolving the potential unknown contingencies underlying the Holdback.

Cautionary Information About Forward-Looking Statements. All statements relating to the Holdback and any potential tax benefits that may be realized by the Company during the wind-down period are forward-looking statements. The amount of the Holdback could be more or less than the amount necessary to resolve all of the Company’s contingencies if one or more of the underlying assumptions or expectations the board used in setting the Holdback proves to be inaccurate. Certain important factors, risks and uncertainties that could cause the actual amount of the Company’s potential unknown contingencies to differ materially from the Holdback are described herein or in the risk factors included in the Proxy and the Company’s Annual Report on Form 10-K for the year ended September 30, 2011 as amended, filed with the SEC on December 14, 2011. The forward-looking statements included in this report speak only as of the date of this report or the date they were otherwise made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Post-Filing Liquidating Distributions. After the Company has satisfied or made reasonable provision for all of its liabilities in accordance with the Company’s Plan of Dissolution and the DGCL, any remaining assets of the Company (including any unused portion of the Holdback or potential tax benefits realized by the Company) will be distributed to stockholders of record as of the Dissolution Record Date on a pro rata basis in one or more post-Filing liquidating distributions (the “Post-Filing Liquidating Distributions”). The actual amount and timing of such Post-Filing Liquidating Distributions, if any, will be dependent, however, upon numerous future events involving uncertainty, including, but not limited to, the amount of potential tax benefits, if any, that may be realized by the Company, the resolution of all contingencies, including, but not limited to, the DOJ’s ICD investigation, the ultimate settlement amounts of the Company’s liabilities and obligations, and the actual costs the Company incurs in connection with carrying out the Plan of Dissolution, including administrative costs during the wind-down period. The actual amount of net assets remaining that are available for any Post-Filing Liquidating Distributions to stockholders following the satisfaction of the Company’s obligations may be materially less per share than investors are currently anticipating based on the Company’s net assets available for distribution reflected on the Company’s Consolidated Statements of Net Assets in Liquidation as of June 30, 2012 included in the Company’s Third Quarter 10-Q filed with the SEC on August 9, 2012.

Creditors of the Company Could Assert Claims Against the Company or its Stockholders. If the Holdback and any other remaining assets of the Company are insufficient to satisfy the Company’s liabilities after the Pre-Filing Distribution and the Filing are made, creditors of the Company could assert claims against the Company seeking to prevent further distributions or against the Company’s stockholders to the extent of distributions previously received by them.

If a court holds at any time that the Company has failed to make adequate provision for its expenses and liabilities or if the amount ultimately required to be paid in respect of such liabilities exceeds the amount available from the Holdback and any other available assets of the Company, MedCath’s creditors could seek an injunction against the making of any Post-Filing Liquidating Distributions to the Company’s stockholders. Any such action could delay or substantially diminish the amount of Post-Filing Liquidating Distributions, if any, to the holders of the Common Stock as of the Dissolution Record Date.

If the Holdback and any other remaining assets of the Company are not adequate for payment of the Company’s expenses and liabilities, creditors could also assert claims against each stockholder previously receiving a Post-Filing Liquidating Distribution for the payment of any shortfall, up to the amounts previously received by the stockholder in Post-Filing Distributions from the Company.

Relief from SEC Reporting Requirements. Because it no longer has any significant business operations and in order to curtail expenses, the Company intends, after the Filing is made, to seek relief from the SEC from the periodic reporting requirements it is currently subject to under the Securities Exchange Act of 1934. If the SEC grants such relief, the Company will post on the Company’s website any material developments with respect to any significant transactions for disposing of the Company’s remaining assets, any significant developments in claims, litigation, the DOJ’s ICD investigation or any Post-Filing Liquidating Distributions to the Company’s stockholders, as well as any other future events occurring that could materially impact the timing or amount of any Post-Filing Liquidating Distributions to the stockholders until such time as the Company’s net assets have been distributed or substantially exhausted. In addition, the Company will post on the Company’s website a Statement of Net Assets and a Statement of Changes in Net Assets along with management’s discussion of those changes on a periodic basis.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit 4.1	Amendment No. 1 to Rights Agreement dated August 28, 2012
Exhibit 99.1	Press Release dated August 28, 2012

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MEDCATH CORPORATION
Date: August 28, 2012	By:	/s/ Lora Ramsey
		Lora Ramsey
		Chief Financial Officer

INDEX TO EXHIBITS

Exhibit No.	Description
Exhibit 4.1	Amendment No. 1 to Rights Agreement Dated August 28, 2012
Exhibit 99.1	Press Release Dated August 28, 2012

EX-4.1

Exhibit 4.1

AMENDMENT NO. 1

TO

RIGHTS AGREEMENT

AMENDMENT NO. 1 to RIGHTS AGREEMENT (this “Amendment”) between MedCath Corporation, a Delaware corporation (the “Company”), and American Stock Transfer & Trust Company, LLC as rights agent (the “Rights Agent”) is effective this 28th day of August, 2012.

WHEREAS, the Company and the Rights Agent are parties to a Rights Agreement, dated as of June 15, 2011 (the “Agreement”);

WHEREAS, the Board of Directors of the Company deems it to be advisable and in the best interests of the Company and its stockholders to amend certain provisions of the Agreement;

WHEREAS, no Person (as defined in the Agreement) has become an Acquiring Person (as defined in the Agreement); and

WHEREAS, pursuant to and in accordance with Section 26 of the Agreement, the Company desires to amend the Agreement as set forth below.

NOW, THEREFORE, in consideration of the foregoing premises and mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Rights Agent hereby agree to amend the Agreement as follows:

1. Amendments.

(a) Clause (iii) of Section 1.7 of the Agreement is amended in its entirety to read as follows:

“(iii) any other Person if the Board has determined in its sole and absolute discretion that such Person shall be an “Exempt Person”; provided, however, that any Person deemed to be an “Exempt Person” pursuant to this subclause (iii) will cease to be an “Exempt Person” if the Board thereafter makes a contrary determination.”

(b) Section 7.1 of the Agreement is amended in its entirety to read as follows:

“7.1 Exercise of Rights. Subject to Section 11.1.2 and except as otherwise provided herein, the registered holder of any Right Certificate may exercise the Rights evidenced thereby in whole or in part at any time after the Distribution Date upon surrender of the Right Certificate, with the form of election to purchase and certification on the reverse side thereof duly executed, to the Rights Agent at the office of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price for the total number of one one-thousandths of a share of Preferred Stock (or other securities, cash or other assets) as to which the Rights are exercised, at or prior to the time (the “Expiration Date”) that is the earliest of (i) the close of business on September 30, 2013 (the “Final Expiration Date”), (ii) the time at which the Rights are redeemed as provided in Section 23 (the “Redemption Date”), (iii) the time at which the Rights are exchanged as provided in Section 27, (iv) the time at which the Company’s Board of Directors determines that the Tax Attributes are fully utilized or no longer available under Section 382 of the Code or that this Agreement is no longer required to protect the value or availability of the Tax Attributes, or (v) the time at which this Agreement is terminated by the Company’s Board of Directors, in its sole and absolute discretion, in accordance with Section 36.”

(c) The first paragraph of Section 24 of the Agreement is amended in its entirety to read as follows:

“In case the Company shall propose at any time after the earlier of the Stock Acquisition Date and the Distribution Date (a) to pay any dividend payable in stock of any class to the holders of Preferred Stock or to make any other distribution to the holders of Preferred Stock (other than a regular periodic cash dividend at a rate not in excess of 125% of the rate of the last regular periodic cash dividend theretofore paid or, in case regular periodic cash dividends have not theretofore been paid, at a rate not in excess of 50% of the average net income per share of the Company for the four quarters ended immediately prior to the payment of such dividends, or a stock dividend on, or a subdivision, combination or reclassification of the Common Stock), or (b) to offer to the holders of Preferred Stock rights or warrants to subscribe for or to purchase any additional Preferred Stock or shares of stock of any class or any other securities, rights or options, or (c) to effect any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision of outstanding Preferred Stock), or (d) to effect any consolidation or merger into or with, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person (other than pursuant to a merger

or other acquisition agreement of the type excluded from the definition of “Beneficial Ownership” in Section 1.3), or (e) to declare or pay any dividend on the Common Stock payable in Common Stock or to effect a subdivision, combination or consolidation of the Common Stock (by reclassification or otherwise than by payment of dividends in Common Stock), then, in each such case, the Company shall give to the Rights Agent and to each holder of a Right Certificate, in accordance with Section 25, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, or transfer is to take place and the date of participation therein by the holders of the Preferred Stock and/or Common Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (a) or (b) above at least ten (10) days prior to the record date for determining holders of the Preferred Stock for purposes of such action, and in the case of any such other action, at least ten (10) days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the Preferred Stock and/or Common Stock, whichever shall be the earlier.”

(d) The Agreement is amended by adding a new Section 36 thereto which shall read as follows:

“Section 36. Termination. Notwithstanding anything to the contrary contained herein, the Company’s Board of Directors may, in its sole and absolute discretion, by resolution terminate this Agreement at any time, and upon such termination becoming effective, all Rights issued hereunder shall automatically become void, expire and be extinguished. Such termination shall be effective immediately (except as may otherwise be provided for in the resolution of the Company’s Board of Directors) and upon such termination this Agreement (and the Rights issued hereunder) shall be of no further force or effect, notwithstanding that (i) any Person may have become an Acquiring Person, (ii) a Trigger Event may have occurred, (iii) a Distribution Date may have occurred, or (iv) the Rights may have otherwise become exercisable.”

2. Effect of this Amendment. It is the intent of the parties that this Amendment constitutes an amendment of the Agreement as contemplated by Section 26 thereof. This Amendment shall be deemed effective as of the date hereof as if executed by both parties hereto on such date. Except as expressly provided in this Amendment, the terms of the Agreement remain in full force and effect.

3. Counterparts. This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute one and the same instrument.

4. Governing Law. This Amendment shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such state applicable to contracts to be made and performed entirely within such state.

5. Severability. If any term, provision, covenant or restriction of this Amendment is held by a court of competent jurisdiction or other authority to be invalid, illegal or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

6. Descriptive Headings. The captions herein are included for convenience of reference only, do not constitute a part of this Amendment and shall be ignored in the construction and interpretation hereof.

[Signature Page Follows]

MEDCATH CORPORATION
By:	/s/ James A. Parker
Name: James A. Parker
Title: President and Chief Executive Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC
By:	/s/ Joan K. Greenfield
Name: Joan K. Greenfield
Title: Vice President

EX-99.1

Exhibit 99.1

MEDCATH CONTACTS:

Art Parker	Lora Ramsey
President & Chief Executive Officer	Chief Financial Officer
(704) 815-7700	(704) 815-7700

MEDCATH ANNOUNCES PRE-FILING LIQUIDATING DISTRIBUTION OF $6.33 PER SHARE; SETS DATE FOR FILING CERTIFICATE OF DISSOLUTION

CHARLOTTE, N.C., Aug. 28, 2012 – MedCath Corporation (Nasdaq: MDTH) announced that the Company’s Board of Directors today approved a distribution of $6.33 per share, payable in cash on September 21, 2012 to holders of record of the Company’s common stock, par value $.01 (the “Common Stock”) on September 10, 2012 (the “Pre-Filing Liquidating Distribution”). The approval of the Pre-Filing Liquidating Distribution followed the Board of Director’s determination that the conditions outlined in the Company’s proxy statement filed with the Securities and Exchange Commission (the “SEC”) on August 17, 2011 (the “Proxy”), to make an additional liquidating distribution prior to the Filing (as defined below), had been met. The amount of the Pre-Filing Liquidating Distribution is consistent with the high end of the anticipated distribution range described in MedCath’s Form 10-Q filed with the SEC on August 9, 2012.

MedCath’s Board of Directors has approved the filing of a certificate of dissolution with the Secretary of State of the State of Delaware on September 21, 2012 (the “Filing”). Trading in the common stock on the NASDAQ Global Select Market will be suspended after the regular market officially closes at 4 p.m. EDT on September 21, 2012. MedCath will then close its stock transfer books and not record any further transfers of its common stock on its books except by will, intestate succession or operation of law.

“We are pleased to have achieved this important milestone,” said Art Parker, MedCath’s President and CEO. “In March 2010 we set a goal to maximize stockholder value given the difficult regulatory and business environment in which we were operating. We believe that we have accomplished that, as we will have distributed a total of $13.18 per share to our stockholders once we pay this Pre-Filing Liquidating Distribution.”

To provide a source of funds for contingencies the Company may incur during the wind-down period following the Filing, the Board of Directors has determined to hold back $48.0 million, or $2.36 per common share, of cash (the “Holdback”). The Holdback is not intended to satisfy the Company’s recorded wind-down liabilities of approximately $23.8 million that have already been reflected in the Company’s Consolidated Statements of Net Assets in Liquidation as of June 30, 2012. The amount of the Holdback does not take into consideration any potential tax benefits that the Company may realize during the wind-down period. The Company has adopted a Rights Agreement, which was amended on August 28, 2012, that is intended to preserve for the Company’s stockholders the value or availability of certain of the Company’s beneficial tax attributes, but there can be no assurances that the Rights Agreement will prevent an “ownership change” under and as defined in Section 382 of the Internal Revenue Code of 1986, as amended. After the Company has satisfied or made reasonable provision for all of its liabilities in accordance with the Company’s Plan of Dissolution and the Delaware General Corporation Law, any remaining assets (including any unused portion of the Holdback or potential tax benefits realized by the Company) will be distributed to stockholders of record as of the close of business on the date of the Filing on a pro rata basis in one or more post-filing liquidating distributions (the “Post Filing Liquidating Distributions”). The amount and timing of such Post-Filing Liquidating Distributions, if any, are currently unknown.

The Company has filed a Current Report on Form 8-K with the Securities and Exchange Commission reporting the approval of the Pre-Filing Liquidating Distribution, the Company’s intention to make the Filing on September 21, 2012 and other information, including the Company’s amendment to the Rights Agreement and the Company’s intent to seek relief from the periodic reporting requirements it is currently subject to under the Securities Exchange Act of 1934. Investors should review carefully all the information in the 8-K report before making an investment decision with respect to MedCath’s common stock. A copy of the 8-K report is available from the SEC at www.sec.gov or our website, www.medcath.com.

About MedCath

MedCath Corporation, headquartered in Charlotte, N.C., was a health care provider focused on high acuity services with the diagnosis and treatment of cardiovascular disease being a primary service offering. Having now divested all of its hospitals, MedCath is focused on fulfilling transition service obligations to the purchaser of one of its previously owned hospitals, realizing the value of its remaining assets; making tax and regulatory filings; winding down its remaining business activities, managing its known and unknown contingencies, and making distributions to its stockholders as part of its Plan of Dissolution.

All statements relating to the Holdback and any potential tax benefits that may be realized by the Company during the wind-down period are forward-looking statements. The amount of the Holdback could be more or less than the amount necessary to resolve all of the Company’s contingencies if one or more of the underlying assumptions or expectations the Board of Directors used in setting the Holdback proves to be inaccurate. Certain important factors, risks and uncertainties that could cause the actual amount of the Company’s potential unknown contingencies to differ materially from the Holdback are described in the risk factors included in the Proxy and the Company’s Annual Report on Form 10-K for the year ended September 30, 2011 as amended, filed with the SEC on December 14, 2011. The forward-looking statements included in this report speak only as of the date of this report or the date they were otherwise made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.