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In June 2016, AmSurg Corp. and Envision Healthcare Holdings, Inc. (Envision) announced they have signed a definitive merger agreement pursuant to which the companies will combine in an all-stock transaction. Upon completion of the merger, which is expected to be tax-free to the shareholders of both organizations, the combined company will be named Envision Healthcare Corporation and co-headquartered in Nashville, Tennessee and Greenwood Village, Colorado. The company's common stock is expected to trade on the New York Stock Exchange under the ticker symbol: EVHC. Bass, Berry & Sims served as lead counsel on the transaction, led by Jim Jenkins. Read more.

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Inside the FCA blogInside the FCA blog features ongoing updates related to the False Claims Act (FCA), including insight on the latest legal decisions, regulatory developments and FCA settlements. The blog provides timely updates for corporate boards, directors, compliance managers, general counsel and other parties interested in the organizational impact and legal developments stemming from issues potentially giving rise to FCA liability.

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Delaware Bankruptcy Court Vindicates AutoZone in Four-Year Litigation by Chapter 7 Trustee

June 22, 2011

Significant Win for Memphis Company as Federal Court Condemns Trustee’s Case Administration

Memphis, Tenn., (June 22, 2011) - On June 9, 2011, a Delaware bankruptcy court ruled in favor of Memphis-based AutoZone, rejecting approximately $7 million in claims asserted by Montague S. Claybrook, the Chapter 7 Trustee for the estates of American Remanufacturers, Inc. (ARI).

Montague S. Claybrook, as Chapter 7 Trustee of the estates of American Remanufacturers, Inc., et al. v. AutoZone Texas, L.P. et al. 07-51597 (PJW) was the lead case in a series of related adversary proceedings filed by the Trustee against ARI’s former customers. All of the other adversary proceedings were stayed pending disposition of the Trustee’s action against AutoZone.

The Trustee originally sought over $12 million from AutoZone for claims related to alleged accounts receivable remaining on the Debtors’ books after the automotive parts remanufacturing companies ceased operations in 2005.

After four years of litigation that included a $100,000 discovery sanction against the Trustee, and the Trustee's abandonment of some of his original claims, the United States Bankruptcy Court for the District of Delaware ruled that AutoZone was entitled to recoup approximately $9 million in credits owed to it by the Debtors. The ruling extinguishes the Trustee’s claims against AutoZone in their entirety.

"This case is a significant one because it moves the needle toward creditors' rights in bankruptcy disputes," said Kristen Wright, AutoZone's lead trial counsel and a member in the Memphis office of Bass, Berry & Sims. "Because it is a pronouncement of the Bankruptcy Court in Delaware, it has national implications."

In a two-day trial before Judge Peter J. Walsh, AutoZone established that account credits arose from certain deductions and allowances to which AutoZone was entitled under the parties’ vendor agreements, as well as credit for rejected product returns that, as AutoZone successfully claimed, ARI was obligated to accept both before and after the date the company converted from a Chapter 11 to a Chapter 7 bankruptcy.

Significantly for creditors, the Court found "no strict requirement that credits must 'match' accounts receivable for those credits to be recouped against the open accounts." Instead, said the Court, "the credits issued by the [Debtors] were an integral part of the parties' overall relationship and constituted a component of an integrated transaction between the parties."

Also significant, the Court permitted AutoZone to recoup its claimed credits collectively against the Debtors’ estates as a whole, even though the accounts receivable and credits claimed involved three debtor entities. Condemning the Trustee’s case administration, the Court stated that the "Trustee’s attempt to segregate the Debtors assets solely for purposes of setoff and recoupment in this accounts receivable case simply does not reflect the reality of his own case administration for the past five years." The Court ruled that, as a matter of equity, because the Trustee had administered the companies as a single entity, no artificial distinction between the three was justified.

AutoZone was represented at trial by Kristen C. Wright and Russell E. Stair of Bass, Berry & Sims PLC and Sommer L. Ross of Duane Morris LLP. The Plaintiff was represented at trial by Fox Rothschild LLP and Alan L. Frank Law Associates, P.C.

Click here to read the Judge's Order.

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