Incisive Strategies. Decisive Results.
Securities Litigation
When a regional competitor of a firm client secured a sequence of financing from one of the nation’s oldest investment banks, it expanded its board to provide seats for the bank’s designees. The competitor also secured valuable contracts with service providers in northern New England, which required specific service area geographic definitions, to be associated with rates charged under the contracts.
The ResnickLaw client, represented by separate corporate counsel, in reliance in part upon statements set forth in a confidential information memorandum from the competitor, entered into an acquisition agreement to acquire the competitor. The client completed the diligence process, and paid tens of millions of dollars to acquire the stock and assets of the company. Following the acquisition, with ten percent of the purchase price held in escrow for post-closing adjustments, the firm client discovered that the competitor had intentionally manipulated the service area definitions applicable to its vendor contracts in order to illegally inflate its rates and resulting revenue. The purchase price paid by the client for the stock and assets had consequently been grossly inflated.
The client retained ResnickLaw to investigate and prosecute claims arising from the transaction. Because it now owned the competitor, it at first appeared that the client’s claims would have to target the large former shareholders of the competitor. The ResnickLaw team quickly discovered that the board, controlled and directed by the investment bank designees, had not only know about the improper billing practices, but had ratified the manipulation of the pricing. RenickLaw brought claims against he investment bank and the former shareholders of the competitor for violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, Controlling Person Securities Fraud (15 U.S.C. § 78t), common law fraud, negligent misrepresentation, breach of representations and warranties associated with the acquisition agreement, and declaratory judgment as to amounts held in escrow.
The defendants deployed every procedural device available to avoid liability and increase costs, moving first to dismiss, then to change venue. They vigorously resisted ResnickLaw’s discovery efforts, requiring multiple motions to the court and multiple orders compelling them to cooperate. When discovery closed and with ResnickLaw’s motion for summary judgment pending, all the defendants settled, on terms highly favorable to ResnickLaw’s client. The client recovered the entire overpayment amount, quickly received escrowed funds, and was compensated for its legal costs and expenses. The favorable settlement resulted from carefully crafted claims designed to place liability outside the defendants’ insurance coverage, a clever and determined discovery strategy, and a summary judgment posture with a high likelihood of success.
Stock Purchase Agreement
When a company executive was forced out of his position, the company executed a stock purchase agreement for a phased repurchase of the executive’s 550,000 shares for a total price of more than $1.1 million. The purchase was secured by a promissory note. Thereafter, the company encountered financial difficulties and fell behind in its repayment obligations. The former executive eventually sued for the accelerated balance plus liquidated damages, and the company retained ResnickLaw to defend.
ResnickLaw first successfully defeated the plaintiff’s multiple motions to attach company assets. Next it drew the plaintiff into extensive and extended discovery. The prospect of extended time in discovery with no payments on the obligation and no company assets attached soon resulted in the plaintiff’s enthusiastic embrace of a potential settlement. ResnickLaw was able to quickly structure a settlement in which future repayment of the obligation was secured by preferred positions on designated company equipment. The company avoided having to escrow badly needed cash, and the matter settled well short of trial for modest litigation costs, with a repayment schedule highly favorable to the company.
Copyright Infringement
An organization with the copyright for a revolutionary treatment approach for behavioral disorders learned that a former associate was marketing a competing approach using expression that was substantially similar to the copyright protected text owned by the organization. ResnickLaw brought a federal copyright infringement action on behalf of the organization. Copyright infringement had only rarely been successfully alleged where the expression was associated with an evidence based psychological treatment approach, due in part to the complexity of the evidence issues, and in part to the difficulty of avoiding summary judgment pursuant to the “merger doctrine” in copyright law.
In this case, the defendant was associated with a major medical research institution, and the plaintiff organization had been unable to locate any firm in the region willing to bring the case. ResnickLaw litigated the action for four years, surviving in succession the copyright “dissection analysis” and then the defendant’s summary judgment motions. Several rounds of mediation failed to produce an acceptable settlement. The case tired for two weeks to a jury in federal court and ended with a jury verdict finding in favor of the firm’s client for copyright infringement, and awarding monetary damages.
Manufacturing Supply Contract
ResnickLaw’s client produced women’s cosmetics and depended on a sufficient supply of plastic bottles in varying sizes in order to complete its manufacture cycle. The company’s plastic bottle producer began delivering bottles that failed to meet the production specifications at the start of the pre-holiday cycle. When repeated negotiations failed to rectify the issue, the client was forced to find an alternate supplier which charged far more and which could not deliver the necessary quantity in time for the holiday season.
ResnickLaw brought an expedited action for breach of the supply contract, and sought injunctive relief to compel the defendant manufacturer to alter its production schedules to assist in meeting the client’s needs. The firm then obtained summary judgment in the client’s favor for money damages, obtaining more than $1,000,000 for the client to compensate it for reduced sales volume over the holiday season and the increased cost of the alternate manufacture. The entire matter resolved without the need to proceed to trial.