On November 13, 2018, the United States Supreme Court denied the petition for certiorari filed by the CEO of PHC, Inc. The CEO 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 First Circuit found that the shareholder class, represented by Wolf Popper LLP, had demonstrated at trial that the CEO “dominated PHC and had pervasive control over its affairs” and used this control to negotiate an unfair cash payment for himself as part of a merger agreement. Accordingly, 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 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.”
The PHC trial and appellate team consisted of Chet B. Waldman, Jeffrey W. Chambers, Patricia I. Avery, and Adam J. Blander.
Read more about this victory for investors here.