Templin v. Baier et al., Civil Action No.: 3:21-cv-00373 (M.D. Tenn.). On July 9, 2025, the Hon. Aleta A. Trauger granted final approval of a shareholder derivative settlement resolving derivative claims brought on behalf of Brookdale Senior Living, Inc. (“Brookdale” or the “Company”) in the Action.
The Action alleged that the Individual Defendants breached their fiduciary duties of good faith, loyalty, and care by causing Brookdale to understaff its senior living communities and to misrepresent the level of care provided, advertised, and promised to residents. According to the allegations in the Action, the Individual Defendants caused Brookdale to understaff its communities by failing to supervise the Company’s internal controls, resulting in staffing decisions being determined by a staffing platform allegedly controlled and managed at Brookdale’s corporate headquarters, rather than determined by the specific communities involved in resident care. This alleged intentional understaffing of Brookdale’s senior living communities breached the Company’s residency agreements and caused Brookdale residents to suffer harm. The Action further alleges that the Individual Defendants breached their fiduciary duties by disseminating materially false or misleading information to Brookdale shareholders through Brookdale’s filings with the Securities and Exchange Commission (“SEC”) and other public statements and disclosures.
The Settlement consists of a series of robust corporate governance reforms designed to directly address the alleged wrongdoing in the Action. Specifically, as part of the Settlement, Brookdale agreed to adopt a comprehensive set of corporate governance, oversight, and internal control reforms that are specifically tailored to the alleged internal control deficiencies the derivative plaintiff contends allowed the alleged wrongdoing to occur, as well as broader best practice reforms designed to enhance the overall independence and effectiveness of Board oversight. The reforms include, among other things, formalization of and enhancements to the Company’s Risk Committee, enhancements to the Brookdale Audit Committee Charter, enhancements to the Company’s whistleblower policies and practices, and modifications to the Company’s executive compensation program. As a result of the implementation and maintenance of the reforms, Brookdale will face reduced risk of similar alleged misconduct occurring in the future over the four-year implementation term.
Johnson Fistel served as co-lead counsel in the federal derivative action settlement and was instrumental in negotiating the terms of the settlement. Attorneys Michael I. Fistel, Jr., Mary Ellen Conner, Oliver tum Suden, Anthony E. Mance, and Ashley Schaf led the prosecution of the litigation for Johnson Fistel, and along with co-lead counsel, helped to achieve this excellent result on behalf of Brookdale and its shareholders.
