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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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Chris Lazarini Comments on Citigroup ERISA Class Action

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June 15, 2015

Bass, Berry & Sims attorney Chris Lazarini commented on an ERISA class action against Citigroup in which the court dismissed the claims after finding that the statute of limitations expired. Chris provided the analysis for Securities Litigation Commentator (SLC). The full text of the analysis is below and used with permission from the publication. If you would like to receive additional content from the SLC, please visit the SLC website to sign up for the newsletter.

Citigroup ERISA Litigation, In Re, No. 11 CV 7672 (S.D. N.Y., 5/13/15) 

*ERISA's statute of limitations bars claims brought six years after the ERISA violation, but a plaintiff who has "actual knowledge" of the violation may not sleep on his rights and must bring his claim within three years of acquiring such knowledge.

**"Actual knowledge" means having knowledge of all material facts necessary to understand that an ERISA violation has occurred. 

Plaintiffs brought this ERISA-based class action on behalf of participants in two Citigroup 401(k) Plans. The Plans were self-directed, offering multiple investment options, but requiring that one option be the Citigroup Common Stock Fund, which invested exclusively in Citigroup common stock. Plaintiffs alleged that Defendants breached their fiduciary duties by failing to limit the Plans' investments in Citigroup common stock, which fell from $27.23 per share to $0.97 per share between January 16, 2008 and March 5, 2009. Defendants moved to dismiss, arguing that the claims were time-barred and that Plaintiffs failed to state a claim upon which relief may be granted. This is the second ERISA-based case against Defendants relating to the Plans. In the prior case ("Citi I"), the trial court dismissed claims focused on the decline in the stock price between January 1, 2007 and January 15, 2008, finding that defendants did not have the discretion or duty to override the Plans' requirement that the Citigroup Common Stock Fund be among the investment options. The Second Circuit Court of Appeals affirmed. 

The Court concludes that the Complaint should be dismissed because Plaintiffs had "actual knowledge" of the vast majority of the events described in the Complaint – the precipitous decline in stock price, rating agency downgrades, numerous sell recommendations from analysts, and the widespread failure of subprime mortgages – more than three years before the Complaint was filed, because those events had already occurred and were already well publicized. The Court rejects Plaintiffs' argument that the limitations period should have been tolled while Plaintiffs waited for the appellate decision in Citi I, because no such tolling doctrine exists and Plaintiffs do not offer any basis for the argument. The Court also rejects Plaintiffs' argument that Citigroup concealed the wrongdoing by issuing positive statements. Citigroup's statements, the Court finds, did not wipe away Plaintiffs' knowledge of Citigroup’s perilous condition at the time they were made.

The Court also finds that Plaintiffs failed to state claims sufficient to survive the 12(b)(6) motion. First, all claims as to one Plan lack standing, because no named plaintiff was a participant in that Plan. Second, Defendants who were not members of the Investment Committee or Administration Committee are not ERISA fiduciaries and are therefore not liable for breach of fiduciary duty. Next, Plaintiffs alleged no "special circumstances" rendering imprudent the Investment and Administration Committees' reliance on market price, nor did Plaintiffs allege facts showing that the Committees failed to act prudently in response to non-public information. Finally, the Court dismisses the claims against Citigroup, Citibank, and the Director Defendants because they depend on the existence of an underlying breach of fiduciary duty that the Court finds does not exist.


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