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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 Court's Remand for Clarification of Arbitration Award

Securities Litigation Commentator


October 10, 2017

Chris Lazarini | Contributing Legal Editor | Securities Litigation CommentatorBass, Berry & Sims attorney Chris Lazarini commented on a case in which a court took the unusual step of remanding a case to the arbitration panel to explain the rationale behind its award. The Court made the decision because it could not determine whether the arbitrators manifestly disregarded the law or simply made a mistake. The Court instructed the panel to clarify which of Claimant's claims led to the award and the basis for its attorneys' fee award.

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.

Interactive Brokers LLC vs. Saroop, No. 3:17cv127 (E.D. Va., 8/31/17)

*Where a court cannot imagine a plausible basis for an Award, and it is impossible to know whether the arbitrators manifestly disregarded the law or merely made a mistake, it is appropriate to remand the Award to the arbitrators for a clarification. 

**This is a rare case where the Court, after reviewing a non-reasoned arbitration Award, remands to the FINRA Panel for clarification on the predicate for liability and explanation of the damages under the manifest disregard of the law standard. 

After Defendants (Claimants in the arbitration) opened accounts with Interactive in 2012, their independent financial advisor engaged in high-risk options trading on margin. The strategy was initially highly profitable, and Defendants' accounts peaked on August 19, 2015, but a spike in volatility over the next five days resulted in the accounts losing 80% of their value and triggered Interactive's auto-liquidation procedures. When the dust settled, Defendants' accounts had been fully liquidated, and Defendants still owed a significant margin balance. 

Defendants filed an arbitration asserting nine claims for relief. Interactive counterclaimed for the margin debt. The Panel awarded Defendants compensatory damages equal to their highest account values, plus significant attorneys' fees. Although the Award (FINRA ID #15-03035 (Richmond, 1/10/17)) was non-reasoned, the Panel stated its attorneys' fees calculation methodology, awarding Defendants 40% of the compensatory damages, plus 30% of the debits claimed by Interactive. 

The parties filed cross-petitions with the Court. The Court initially recognizes the well-established limitations on judicial review of arbitration Awards, particularly non-reasoned Awards. The Court is troubled by the fact that it must speculate on whether the arbitrators followed the law, but concludes they were arguably acting within their authority, so it cannot vacate the decision. Nevertheless, the Court continues, "even after giving the arbitrators every benefit of the doubt possible," it can discern no plausible scenario where the compensatory damages award makes sense. The Court goes on to say that, because it cannot determine which of the nine claims caused the Panel to find for Claimants, it is impossible to know if the arbitrators manifestly disregarded the law or simply made a mistake. Finally, the Court finds nothing in the record to which the Panel's attorneys’ fees calculation can be attached. Stating that it will not act as a "rubber stamp," the Court remands the case to the Panel, asking it for a "brief explanation" of the basis of the damages and attorneys' fees awarded. 

*This decision is predicated on the court's genuine puzzlement over an Award that does not make sense to it. While it recognizes that a mere error by the arbitrators would be insufficient to justify vacatur, implicit in its reasoning is the assumption that arbitrators are bound by the law. 

**A New York state court similarly remanded to the arbitrators for a clarification of a non-reasoned Award, also after the obligatory obeisance to the limited scope of its review, in Kaufman v. Kaufman Brothers, L.P. (SLA 2011-40) and Siegel v. Gangi (SLA 2014-12).

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