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Standard Management launches arm to protect investors

February 13, 2007
Standard Management Corp. has started a new unit to attract investors.

The troubled Indianapolis company said today that the unit, Universal Healthcare Co. LLC, will provide pharmaceuticals to the long-term care industry—a strategy the former insurer has struggled to implement since 2002.

Universal Healthcare in turn has agreed to buy Precision Healthcare Inc. from Standard Management for $4.2 million. Standard bought the Nashville, Tenn.-based company in July 2005.

Neither the identity of the investors nor the amount they invested in Universal Healthcare was disclosed, but a statement said it was formed to protect the new investors from future losses.

Indianapolis-based Standard Management
lost $10.8 million in the third quarter, nearly tripling the $3.8 million loss sustained a year earlier. The company also saw revenue decline 10 percent, to $4.9 million.

Since June, the pharmaceutical provider defaulted on a loan to buy a Seattle-based pharmacy, borrowed $3.3 million from Indianapolis developer Michael Browning and sold two pharmacies it had owned less than 18 months, including the one in Seattle.

Standard Management also agreed to buy another pharmacy, but the deal hasn't closed, despite an expected closing date of Oct. 13. The company delisted itself from NASDAQ in May.
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