Berman Tabacco

PHC, Inc.

In re PHC, Inc. Shareholder Litigation (MAZ Partners, LP v. Bruce A. Shear, et al.), No. 1:11-cv-11049-PBS (D. Mass.)

Berman Tabacco is co-counsel in this case alleging that Bruce Shear, the Chief Executive Officer and President of PHC, Inc. (“PHC”) was PHC’s controlling shareholder and in that role negotiated a $5 million “sweetener” for himself as a condition to allowing a merger between PHC and Acadia Healthcare, Inc.

After six years of litigation, two trips to the United States Court of Appeals for the First Circuit and a two-week trial, the jury returned a special verdict finding that Mr. Shear was PHC’s controlling shareholder and that he breached his fiduciary duty to PHC’s minority shareholders.  Following post-trial briefing, the court exercised its equitable power and ordered Mr. Shear to disgorge $3 million of his “ill-gotten gains” so as to deprive him of “the fruits of his wrongdoing.”

Boston partners Norman Berman and Nathaniel Orenstein were key members of the trial team in this breach of fiduciary class action, tried to a jury before the Honorable Patti B. Saris.  On November 13, 2018, the United States Supreme Court denied the petition for certiorari filed by the CEO of PHC, Inc.

Case Information

  • Settlement Amount:
    $3,000,000