Northstar Healthcare Announces Termination of Arbitration Claims

TORONTO and HOUSTON, Dec. 15 /CNW/ - Northstar Healthcare Inc. (TSX:NHC) today announced that the Special Litigation Committee of its Board of Directors has determined that it would not be in the best interest of Northstar or its shareholders to continue to pursue the Company's claims against Dr. Donald Kramer and related entities. The Committee determined that Northstar would be unlikely to succeed if it pursued the arbitration to a final conclusion. The Special Litigation Committee was established in October to review Northstar's arbitration claims against Dr. Kramer and related entities. The Committee's decision was based on discussions with Northstar's legal counsel in the arbitration matter and on advice from a highly regarded Texas law firm that acted as independent counsel to the Committee. The independent counsel prepared an exhaustive analysis of Northstar's arbitration claims and concluded that Northstar was unlikely to prevail on its claims and therefore it would not continue with the arbitration claims. Additionally, with an estimated $2,500,000 in additional legal fees and expenses to pursue the arbitration, continuing the arbitration would materially threaten Northstar's business plan. Dr. Kramer has concurrently agreed to abandon his arbitration claims against the Company.

About Northstar Healthcare, Inc.
Northstar owns and/or manages ambulatory surgery centers in the United States, focusing initially on Houston and other metropolitan areas in Texas. The Company holds interests in two ambulatory surgery centers in Houston and manages a third surgery center in Dallas.

Forward-looking statements
This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to business of Northstar Healthcare Inc. (the "Company") and the environment in which it operates. Forward-looking statements are identified by words such as "believe", "anticipate", "expect", "intend", "plan", "will", "may" and other similar expressions. These statements are based on the Company's expectations, estimates, forecasts and projections. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. These risks and uncertainties are discussed in the Company's regulatory filings available on the Company's web site at www.Northstar-Healthcare.com or at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances.

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