Apria Healthcare Officials Accused of Fraud in Suit
COSTA MESA — Apria Healthcare Group Inc. and six of its executives and directors were accused in a shareholder lawsuit of committing securities fraud by concealing how badly the company was doing while selling more than $14 million in stock during the last three years.
The suit, filed in U.S. District Court in Los Angeles, is the first filed against the firm in the wake of its troubles during the last few years. The suit seeks class-action status for investors who bought shares in the Costa Mesa home health-care company from March 2, 1995, to Jan. 20.
Current and former executives “were able to maintain Apria’s stock price at artificially high prices,” allowing them “to dump substantial portions of their own Apria stock,” the suit asserts.
“These types of suits are fairly typical for corporations that have gone through what we have,” said Apria spokeswoman Sheree L. Aronson. “We’re disappointed but not surprised. We will defend it. The suit has no material impact on our operations.”
On Jan. 19, the company announced a restructuring and top-level changes as its chairman-chief executive quit along with two other executives.
The suit contends that the company’s 1995 formation through a merger of Abbey Healthcare Group Inc. and Homedco Group Inc. was doomed because of pervasive information systems problems and because Apria had resorted to paying doctors for patient referrals.
Last year, Apria agreed to pay the federal government $1.65 million to settle a lawsuit claiming the company paid a Georgia medical group for referring home health-services patients.
Apria’s stock closed Friday at $13.69 a share, down 6 cents in New York Stock Exchange trading.
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