On November 13, 2018, the United States Supreme Court denied the petition for certiorari filed by the CEO of PHC, Inc., Bruce A. Shear. Mr. Shear sought to appeal a decision from the United States Court of Appeals for the First Circuit, which, earlier this year, affirmed a judgment ordering him to disgorge over $3 million to PHC’s shareholders. In affirming the judgment, the First Circuit found that the shareholder class had demonstrated at trial that the CEO “dominated PHC and had pervasive control over its affairs,” and that he used this control to negotiate an unfair cash payment for himself as part of a merger agreement. Accordingly, the appellate court found that disgorgement of the CEO’s “inflated portion [of the payment] gained through his breach of fiduciary duty” was “suitably tailored to redress [his] inequitable conduct.”
The appellate court noted that the questions presented in the appeal were “intricate, entangled and in some instances novel,” and complimented counsel for their “unusually good arguments.”
Read more about this victory for investors here.
The case is: 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 on behalf of the class. Norman Berman and Nathaniel Orenstein lead this case for the firm.