Arent Fox Wins Summary Judgment in PHC Shareholder Litigation
Washington, DC — On September 30, a Massachusetts federal judge granted summary judgment and ruled in favor of Arent Fox LLP’s clients, PHC Inc., its former directors, and Acadia Healthcare Company, Inc., in a shareholder dispute case stemming from the 2011 merger of PHC and Acadia. Complex Litigation partners James H. Hulme and Matthew Wright represented PHC, its former directors, and Acadia before the US District Court for the District of Massachusetts. A copy of the decision can be found here.
“We are very pleased with the outcome,” said Mr. Hulme. “We are gratified that the court agreed with our argument that acquiescence applies while concluding there was no showing of any damage or injury, especially in light of Acadia's performance since the merger.” Acadia has a current market capitalization of $2 billion.
The shareholder complaint had accused the companies of giving one class of PHC shareholders a better deal than the other in the merger. But in the decision, US District Court Judge George A. O’Toole Jr. wrote that, “The matter could be framed as a lack of standing or as the absence of proof of an essential element of the claims. In either event, the fact that the plaintiffs are unable to demonstrate that they have suffered an actual injury is fatal to their claims.”
In 2011, Corporate & Securities partners Steven A. Cohen and Jeffrey E. Jordan represented PHC in its acquisition by Acadia. The merger agreement called for PHC, which operates psychiatric and substance abuse facilities, to be folded into Acadia and its subsidiary.
Mr. Hulme has more than 33 years of experience in handling jury and bench trials in the areas of intellectual property, securities, commercial, insurance, bankruptcy, environmental, and First Amendment cases. In addition, Mr. Hulme maintains an active alternative dispute resolution practice and regularly serves as lead counsel in arbitration hearings. Mr. Wright practices in the areas of complex commercial litigation, technology and intellectual property litigation, real estate and real estate tax litigation, and unfair competition law.
Strategic, aggressive, and innovative, Arent Fox’s Complex Litigation practice has been recognized by Chambers USA for its “streamlined” approach that delivers “quality” results. With more than 125 litigators, the practice boasts a deep bench and international reach while having extensive experience in bet-the-company cases before federal and state courts and regulatory agencies. The group is especially proficient at managing parallel litigation in multiple jurisdictions and represents clients in matters that include intellectual property, health care, life sciences, trade, automotive, insurance, and human rights abuses.