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to the practice agreement, petitioner received $242,556 from the
hospital.
On January 1, 1994, petitioner and the hospital executed a
First Amendment to Professional Practice Agreement (amended
agreement). The amended agreement provided:
Hospital intended that Physician, upon expiration of
the Income Guarantee, be required to repay that portion
of the Income Guarantee not repaid pursuant to the
Guarantee Payback, regardless of the level of
Physician’s gross income, * * *.
The amended agreement also stated:
WHEREAS, Physician acknowledges that he, consistent
with this intent, has accounted for amounts advanced by
Hospital pursuant to the Income Guarantee as a loan and
not as income.
In connection with the amended agreement, petitioner executed a
promissory note on January 1, 1994, in the amount of $261,094.
If petitioner ceased practicing in that area, the outstanding
principal balance would be due and payable in full. After more
than 6 years of practice in the area, petitioner ceased in
November 1998.
Petitioner and the hospital discussed repayment of the
promissory note balance by assigning to the hospital petitioner’s
accounts receivable from his practice. On March 2, 1999, the
hospital wrote petitioner that the value of his accounts
receivable had decreased substantially. The hospital then
requested immediate payment of the outstanding balance of
$110,780.
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Last modified: May 25, 2011