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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 Analyzes Putative Class Action Involving Pump-and-Dump Stock Scheme


September 28,2015

Bass, Berry & Sims attorney Chris Lazarini analyzed a putative class action case where plaintiffs sought to recover damages after purchasing stock in an over-the-counter pump-and-dump scheme. The Court, citing section 4(a)(3)(A) of the Securities Act, granted Defendants' motion for summary judgment because the securities were sold more than 40 days after the first bona fide public offering. 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.

Biozoom, Inc. Securities Litigation, In Re, No. 1:14-CV-01087 (N.D. Ohio, 8/20/15) 

A dealer that is not an issuer or underwriter and that sells unregistered securities more than forty days after the security is bona fide offered to the public may find a safe harbor in Section 4(a)(3)(A) of the Securities Act of 1933. 

In this putative class action, Plaintiffs, victims of a pump-and-dump scheme, sought to recover against broker-dealers, acting as market makers, who sold Biozoom shares on the over-the-counter Bulletin Board. In an earlier opinion, the Court dismissed all claims except Plaintiffs' claims as to certain Defendants under Section 12(a)(1) of the Securities Act of 1933. Section 12(a)(1) prohibits the offer or sale of unregistered securities. Defendants argued that they were exempt from the registration requirements, relying on Section 4(a)(3)(A) of the Act, which exempts transactions by dealers, except those "taking place prior to the expiration of forty days after the first date upon which the security was bona fide offered to the public by the issuer . . .." Defendants argued that the forty-day period ran in 2008, when Biozoom (then named Entertainment Arts) filed its registration statement with the SEC, whereas Defendants' sales occurred in 2013, and therefore fell within the exemption. Plaintiffs countered that the date of registration was irrelevant and that each new distribution required registration and the commencement of a new forty-day period. Under that theory, Defendants would be liable because their Bulletin Board sales took place within forty days after the shares first appeared on the Bulletin Board in the 2013 pump-and-dump scheme.

The Court disagrees with both parties, concluding that, while the filing of a registration statement is evidence of a bona fide offer to the public, it is not conclusive. On the other hand, the Court adopts a literal interpretation of the statutory "first date" language, concluding that the statute gives no indication that the time period resets every time a new distribution occurs. Having made that determination, the Court concludes that it does not have sufficient evidence to determine at the motion to dismiss stage whether the exemption applies.

After conducting targeted discovery on the issue, the parties stipulated that, on two occasions in late 2012, 300 shares of Entertainment Arts were offered and sold on the Bulletin Board. The parties agreed that those sales constituted the "first date" on which bona fide offers were made to the public. Applying the Court's earlier Section 4(a)(3)(A) interpretation to this fact, the parties stipulated that Defendants were entitled to summary judgment on the Section 12(a)(1) claims because Defendants' sales in 2013 were made more than forty days after the late 2012 sales. The Court agrees, and grants Defendants' motion for summary judgment. 

The Court was apparently not interested in re-visiting its interpretation of Section 4(a)(3)(A). Plaintiffs may have better luck on appeal in this case, which might attract the SEC's interest.

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