American Dental settles with PDG dental group

American Dental Partners Inc., which provides business services to dental practices, said today that it settled a breach of contract lawsuit with PDG PA.

The PDG dental group operates the Park Dental and Dental Specialist clinics in St. Paul and Minneapolis. The dentists claimed American Dental Subsidiary PDHC Ltd. refused to give dentists access to their own funds, interfered with scheduling and insisted on handling all patient complaints. The lawsuit also alleged PDHC granted itself unreasonable service fees and withheld money for new equipment.

Earlier in December, a jury awarded PDG $130.6 million in damages in the case. American Dental did not say whether the settlement affects the jury award. Chief Executive Gregory A. Serrao could not immediately be reached for comment this morning.

The settlement agreement states that American Dental will transfer leases and associated assets for 25 of 31 Park Dental facilities to PDG. It will provide interim management services to PDG for up to nine months. American Dental will also forgive about $3 million accounts due from PDG.

Meanwhile, PDG will pay PDHC a management fee of $19 million, regardless of whether it uses the services. Transfer of the facilities and assets is expected to occur by Feb. 29.

Park Dental is expected to generate approximately $88 million in patient revenue, American Dental said.

Shares of American Dental Partners, which is based in Wakefield, Massachusetts, surged $3.83, or 72 percent, to $9.48 in morning trading as volume jumped. The stock has traded between $4.22 and $29.50 over the last 52 weeks. (AP)