A Happy Client Following Trial
On behalf of a marketing firm, Johnson Fistel pursued claims for breach of contract and fraud against the manufacturer of a weight loss product. After a week-long jury trial, the jury returned a 7-figure verdict in favor of Johnson Fistel’s client including actual and punitive damages. See testimonial from the firm’s client, Ronald T. Fricke. Healthy Life Marketing, LLC, et al. v. Jaime Brenkus’ Sound Body, Inc., Case No. GIC822927 (San Diego Superior Court).
Record Setting Class Action Settlement in Washington
In what is believed to be the largest recovery ever obtained in a class action challenging the price of a merger or acquisition of a public company in a Washington court, on January 20, 2017, the court approved a $12.75 million settlement for the benefit of former Flow shareholders. Specifically, the case challenged the fairness of the price shareholders received from the 2014 acquisition of Flow by American Industrial Partners. Johnson Fistel served as court-appointed Co-Lead Class Counsel.
After three years of hard-fought litigation which included 26 depositions taken throughout the country, defeating defendants’ motions to dismiss, defeating defendants’ motion for summary judgment, and obtaining an order certifying the class, the parties reached an agreement to settle the case just before trial. “I am proud to be part of a settlement that achieved what is now a rarity, more money for the shareholders in a merger case,” said Frank Johnson, one of the founding partners of Johnson Fistel. Cornerstone Research recently published a report regarding M&A shareholder suits in 2015 and the first half of 2016 reporting that amongst the hundreds of merger-related lawsuits identified, only six of those cases resulted in any monetary recovery for shareholders. The report concluded that in merger-related litigation, “monetary consideration paid to shareholders has remained relatively rare.”
Mr. Johnson and W. Scott Holleman were the attorneys at the firm responsible for helping obtain this settlement for shareholders. Englehart v. Brown, Case No. 13-2-33726-6-KNT (King County Superior Court, Washington).
One of the Largest Recoveries in a Derivative Case in Tennessee
Johnson Fistel was appointed sole Lead Counsel in this shareholder derivative action against certain current and former officers and directors of HCA Holdings, Inc., the largest private hospital chain in the country. The derivative claims related to similar facts that resulted in the company paying $215 million to settle a class action lawsuit filed by shareholders who alleged the company used false and misleading information to sell stock during its 2011 initial public offering.
The parties litigated the action for more than four years and attended multiple mediations, after which Johnson Fistel secured an extremely favorable settlement for HCA and its shareholders, including a payment of $19 million to HCA (believed to be among the largest recoveries in a derivative case in the State of Tennessee), the appointment of a new independent director, and implementation of significant corporate therapeutics. Bagot and Steinberg v. Bracken, et al., Case No. 11C5133 (Sixth Circuit Court for Davidson County, Tennessee).
Helped Secure $24 million for the Company
Johnson Fistel was initially appointed Co-Lead Counsel in state court in one of the highest-profile cases in the country challenging the award of backdated stock options by executive officers of Brocade. For years, Brocade’s insiders engaged in a secret stock option backdating scheme designed to reward executives and recruit engineers with stock options priced below their fair market value as of the date of the grants. The U.S. Government pursued and ultimately won criminal convictions against the responsible executives.
On behalf of its client, Johnson Fistel helped prevent an inadequate settlement of a related federal action from being approved, which would have released the officers, directors, and agents of the company responsible for the criminal backdating scheme resulting in no money to the company and only a payment of attorney’s fees for the lawyers. Brocade then formed a Special Litigation Committee and retained Johnson Fistel as co-counsel to Brocade to help litigate claims against ten former officers and directors of the company. After years of litigation, over $24 million was recovered for Brocade. In re Brocade Communications, Systems, Inc. Derivative Litigation, Case No. 1:05cv41683 (Santa Clara Superior Court).
Helped Secure $29 Million for Shareholders
Johnson Fistel was appointed Co-Lead Counsel in a derivative lawsuit that involved claims against the officers and directors of Titan Corporation for breach of fiduciary duty. During the pendency of the litigation, Titan announced that it would be acquired, threatening to cause the shareholders in the derivative action to lose standing. Johnson Fistel then coordinated with counsel in a related derivative action pending in Delaware to negotiate a settlement that resulted in $29 million in increased consideration to Titan’s shareholders in the all-cash merger acquisition. In re the Titan Corp. Derivative Litigation, Case No. GIC 832018 (San Diego Superior Court).