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Envision to Sell to KKR for $9.9 Billion

We represented Envision Healthcare Corporation (NYSE: EVHC) in its definitive agreement to sell to KKR in an all-cash transaction for $9.9 billion, including debt. KKR will pay $46 per Envision share in cash to buy the company, marking a 32 percent premium to the company's volume-weighted average share price from November 1, when Envision announced it was considering its options. The transaction is expected to close the fourth quarter of 2018. Read more

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Six Things to Know Before Buying a Physician Practice spotlight

Dermatology, ophthalmology, radiology, urology…the list goes on. Yet, in any physician practice management transaction, there are six key considerations that apply and, if not carefully managed, can derail a transaction. Download the 6 Things to Know Before Buying a Physician Practice to keep your physician practice management transactions on track.

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Chris Lazarini Comments on Relief of Retaliation Claims under Sarbanes-Oxley Act


June 22, 2015

Bass, Berry & Sims attorney Chris Lazarini commented on the case of Rhinehimer vs. U.S. Bancorp Investments, Inc. in which the Sixth Circuit adopted a reasonable belief standard for claims of retaliatory discharge under the Sarbanes-Oxley Act. 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.

Rhinehimer vs. U.S. Bancorp Investments, Inc., No. 13-6641 (6th Cir., 5/28/15) 

*An employee of a publicly traded company is entitled to relief under §1514A the Sarbanes-Oxley Act, governing claims for retaliation, if he provides information to a supervisor regarding any conduct which he "reasonably believes" to be fraudulent under the federal securities laws.
**The reasonableness of the employee's belief depends on whether the employee believes that a violation of the law has occurred and how an employee of similar training and experience would perceive the totality of the circumstances at the time of the complaint. 

Plaintiff, a securities industry veteran, had a lengthy relationship with a conservative client to whom he recommended a short term bond fund for a portion of his assets, the bulk of which were held in a trust at a bank. Defendant encouraged Plaintiff to recommend other investments to the client, but Plaintiff declined, based on his understanding of the client's estate plan and objectives. Before going on extended disability leave, Plaintiff told the broker covering his accounts not to recommend transactions to the client because he was of advanced age, had declining mental faculties, and had a well thought out estate plan. Notwithstanding this directive, the other broker recommended two investments to the client. Plaintiff believed the investments to be too risky, too expensive and contrary to the client's estate plan. Plaintiff was rebuked when he attempted to discuss his concerns with his direct supervisor. This caused Plaintiff to email his supervising principal, telling her that the trades destroyed the client's estate plan and calling the other broker untrained, uneducated, careless and irresponsible. After returning from disability leave, Plaintiff was told his email led to a FINRA investigation and he was being placed on a performance improvement plan. Plaintiff was terminated when he failed to meet the plan's goals.

Plaintiff brought this Sarbanes-Oxley action, alleging that he had been disciplined and fired in retaliation for complaining about the other broker's activities. The jury returned a verdict for Plaintiff. Defendant appealed from the trial court's denial of its Rule 50 motion for judgment as a matter of law, arguing that the evidence did not support a finding that Plaintiff could have had an objectively reasonable belief that the other broker made unsuitable investment recommendations. Sua sponte, the Court examines the evolution of the reasonable belief standard under the Act. Early interpretations of the Act required the employee's complaint to "definitively and specifically" relate to one of the enumerated categories of fraud set out in the Act before the employee was protected. Thus, the employee had to show that he had a justifiable belief that the legally defined elements of a claim existed.

The Court rejects this standard as too harsh. Recognizing that Congressional intent was to protect those who make good faith reports of suspected fraud, the Court adopts the emerging rule that the employee need show only a reasonable belief that the conduct constitutes a violation of the securities laws. This standard has both a subjective and objective component. The subjective component is met if the employee believes that a violation of the law has occurred. The objective component depends on how an employee of similar training and experience would perceive the totality of the circumstances at the time of the complaint. Here, the Court concludes, the evidence in the lower court was more than adequate to sustain the judgment that Plaintiff had an objectively reasonable belief that the other broker made unsuitable investment recommendations to the client.

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