Psychiatric Centers Again Cancels Partnership Plans

Community Psychiatric Centers’ plan to convert from a corporation to a limited partnership has been canceled for a second time--again because the company’s largest shareholder withdrew its support, the firm’s chairman said Friday.

The withdrawal by J.P. Morgan & Co., which owns 10% of the stock for its clients, makes it unlikely that the Santa Ana-based company will get the necessary two-thirds vote at next Tuesday’s shareholders meeting, said Robert L. Green, Community Psychiatric’s chairman.

New York-based Morgan had opposed the plan when it first was introduced in October as a way of saving on corporate taxes, but later agreed to back the switch to a limited partnership after finding what it thought was a way to protect the tax-exempt status of certain pension funds it administers.

Green said the Morgan firm withdrew its support again Friday, apparently after determining that the tax burden on its clients still would be increased under a partnership structure.