American Medicorp today filed suit against Continental Illinois Bank, charging the bank had solicited its business and then, while in possession of "confidential, proprietary business information" about the company, had turned around and was financing a takeover effort directed against American Medicorp by Humana Inc.
The suit said the giant bank had "for its own profit entered into a conflicting and improper banking relationship with Humana in connection with Humana's exchange offer to the disadvantage of American."
Filed in federal court in Chicago, the suit seeks to enjoin Continental Illinois from providing Humana with $35 million or half the financing in its ongoing bid to take over American Medicorp.
Continental Illinois declined any comment on the suit.
The suit is reminiscent of a similar filing by Microdot Inc. nearly two years ago against the Irving Trust Co. of New York. Fighting a takeover by General Cable Corp. Microdot charged that Irving Trust, which had provided the company with banking services, breached its fiduciary trust and obligations of confidentiality to Microdot when it proceeded to finance the General Cable bid.
The suit led to inconclusive hearings by the Senate Banking Committee. Sources today indicated that the same committee may look into the current situation. Microdot ended up fending off the General Cable bid only by finding another company to take it over - Northwest industries.
Humana and American Medicorp are both hospital management companies.
Humana, based in Louisville, Ky., filed a proposed after on Oct. 2 with the Securities and Exchange Commission for up to 75 per cent of the outstanding shares of American Medicorp, which is located in Bala Cynwyd, Pa. The basis of the Exchange would be $10 net cash and 0.3 shares of a new issue of Humana preferred stock for each American Medicorp share outstanding.
In another move to prevent the takecover, American Medicorp has also filed a suit against Humana charging antitrust violations and claiming a takecover would give Humana a dominant position in the hospital menagement field where the two now compete.