MERGER: Metropolitan Health and ContinueCare

Issue: How do I enter the Metropolitan Health and ContinueCare merger?

Cause: Metropolitan Health completed its merger with ContinueCare on 10/4/2011 for cash and Metropolitan Health stock.
The SEC filing for this merger can be found at through the Metropolitan Health web site at:
http://investor.metropolitanhealthnetworks.com/filings Choose the S-4A filing of 7/11/2011

Resolution:
This merger is a cash plus stock reorganization, which are becoming more and more frequent in recent years. For tax purposes this is treated as a sale of ContinueCare and the proceeds used to purchase Metropolitan Health. All the information below is from the information available from the S-4 filed with the SEC.

1. Sell Transaction
The total merger consideration is $6.42 per ContinueCare share. This is $6.25 in cash and $0.17 in Metropolitan Health shares (4.20/share x .0414 shares). Calculate the total value received for your ContinueCare shares by multiplying 6.42 by the total shares of ContinueCare owned.
Total Proceeds = [6.42 x (# of ContinueCare shares owned)] – (Reorganization fee, if any).
Use the Suspense account to receive the sale proceeds.
Date this transaction 10/3/2011.

2. Transfer Cash Received
Transfer from the Suspense account to the Broker account (or bank if appropriate), all cash received from this transaction. This will be the sum of the $6.25 per ContinueCare share plus any cash-in-lieu received for fractional shares of Metropolitan Health. If your Suspense account balance was zero when you entered the sell transaction above, then the balance after transferring the cash received will be the total purchase price of the Metropolitan Health shares you received in this merger.

3. Buy Transaction
Enter a buy transaction for the WHOLE number of Metropolitan Health shares received in this merger.
Date the transaction 10/4/2011. The total purchase price will be the amount remaining in the Suspense account, if the Suspense balance was zero when this process was started. The amount should be (6.42 x # of ContinueCare shares owned) – (all cash received from this transaction, including cash-in-lieu of fractional shares) – (any reorganization fee charged by your broker).
Save the buy transaction and the entries needed to complete this merger are done.
Do not enter any reorganization fee here. If one was charged it should be used to reduce the amount of the total proceeds from the ContinueCare sale above.