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Firm News Update

Berman DeValerio’s Tenacity Results in Post-Trial Judgment for Plaintiff Class

After six years of hard-fought litigation, including a nine-day trial, Berman DeValerio secured a $3 million disgorgement award against the former CEO and controlling shareholder of PHC, Inc., Bruce A. Shear. The case began in 2011, when PHC agreed to be acquired by Acadia Healthcare, Inc. The plaintiffs alleged that Shear used his position as PHC's controlling shareholder to wrongfully obtain benefits for himself at the expense of PHC's other shareholders. Berman DeValerio aggressively pursued the action on behalf of PHC's aggrieved minority shareholders, overcoming challenging court opinions as well as two trips to the First Circuit Court of Appeals.

Berman DeValerio teamed up with Wolf Popper LLP to bring suit on behalf of MAZ Partners L.P., a private investment company. From the outset, the defendants aggressively litigated the case. After six years of litigation, the case finally proceeded to trial in the spring of 2017 before Chief Judge Patti B. Saris of the District of Massachusetts. After a nine-day trial, the jury returned a special verdict finding that Shear was a controlling shareholder of PHC and that he had breached his fiduciary duty. Judge Saris ordered Shear to disgorge more than $3 million of "ill-gotten gains" so that he would not benefit from "the fruits of his wrongdoing," entering judgment as a matter of law after the jury found that Shear's secret profits did not cause a direct injury to the class.

Commenting on the long road to vindication, Boston partner Norman Berman stated: "This case is an example of how the firm uses class actions to get justice for individuals and organizations who are wronged and to hold corporate fiduciaries accountable. The defendants fought hard from start to finish. However, when we take on a matter, we are prepared to take it all the way to verdict, as necessary."

Berman DeValerio's trial team was led by Norman Berman and Nathaniel Orenstein. Firm investigator Katie Nolan provided key courtroom support, coordinating the preparation and presentation of hundreds of trial exhibits and earning praise from the Court for her efforts.