FPA Can Sell Unit, Ending Presence in State

FPA Medical Management Inc. won a judge’s approval to sell its Axminister Medical Group unit to a group of doctors for $1.35 million, ending the presence of the struggling physicians-practice manager in the California health-care market. U.S. Bankruptcy Judge Peter Walsh approved the sale of Axminister’s health-care network as part of FPA’s effort to reorganize itself after filing for Chapter 11 protection in July. A cash crunch had left the company unable to pay doctors, employees and the interest on its bonds. To help stem losses, FPA officials decided to sell Los Angeles-based Axminister to the group of doctors who had previously sold the practice to FPA. Axminister’s network of 20 doctors provides health-care coverage to 17,000 consumers. FPA bought the network in 1997 for $16.2 million in stock. “This sale marks FPA’s exit from the California market,” said FPA lawyer John Butler. FPA, which had been based in San Diego, moved its headquarters to Miami after the bankruptcy filing. Its retreat from California, without paying the backlog of doctors’ bills, has forced some insurance companies to step in and cover some physicians’ bills.