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transaction would help petitioners obtain a greater amount of
cash consideration for the Facilities.3
In furtherance of the reorganization, petitioners activated
HCA Holding Corp., which prior to that time had been an inactive
HCA subsidiary incorporated under the laws of the State of
Delaware. HCA Investments, Inc. (HCAII), another wholly owned
HCA subsidiary, owned all of the stock of HCA Holding Corp.,
which latter corporation was renamed HealthTrust, Inc.--The
Hospital Co. (HealthTrust).
HCA Management selected R. Clayton McWhorter (Mr.
McWhorter), HCA's then president and chief operating officer, to
become chairman and chief executive officer of HealthTrust. At
that time, he had been employed by HCA for 17 years and had been
a member of HCA's executive management since 1976. Mr. McWhorter
chose Charles N. Martin, Jr. (Mr. Martin), HCA's then executive
vice president for marketing and development, to become president
and chief operating officer of HealthTrust. Mr. Martin had
joined HCA in 1980, after serving as president of General Care
Corp. Mr. McWhorter picked Donald S. MacNaughton (Mr.
MacNaughton), then chairman of HCA's executive committee, to
3 In a leveraged ESOP buyout the funds borrowed to finance the
acquisition to a large extent are repaid with tax-deductible
contributions to the ESOP, and the lenders generally charge less
interest because they receive tax benefits with respect to the
interest they receive.
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