HealthSouth Bondholder Class Certified Sunday, 08 November, 2009
Judge Karon Bowdre certified our class of HealthSouth bond investors. For more information on this bond litigation, contact David Guin or Tammy Stokes.
Recent News
D&G Files ERISA Class Action Regarding Colonial Bancgroup Sunday, 08 November, 2009
D&G has filed an ERISA class action against the Trustees of the 401(k) retirement plan on behalf of former employees of Colonial Bancgroup, Inc. For more information, contact David Guin.
U.S. Supreme Court hears D&G Bond Tax Constitutionality Case Saturday, 08 November, 2008
May 19, 2008: As reported in The Wall Street Journal on September 6, 2006 (“Kentucky Suffers Setback in Muni-Bond Tax Case”), Donaldson & Guin, LLC “recently won a courtroom battle in a case that is stirring widespread interest among municipal-bond investors and state government officials.” D&G brought several cases, including Davis v. Dept. of Rev. of State of Kentucky and Dunn v. State of North Carolina, asserting that Kentucky, North Carolina and other states violate the Commerce Clause of the United States Constitution by imposing an income tax on interest earned on municipal bonds issued in other states, while exempting from income tax the interest earned on in-state bonds.
The Kentucky trial court initially ruled against us, but we appealed and the Kentucky Court of Appeals overturned the trial court’s decision. The Kentucky Supreme Court then refused to review the opinion by the Kentucky Court of Appeals.
In North Carolina, the trial court certified a class of taxpayers and the State appealed to the North Carolina Court of Appeals. On October 17, 2006, the North Carolina appellate court rejected the State’s arguments and affirmed the trial court’s class certification decision. The North Carolina Supreme Court let our opinion stand.
We took our Kentucky case all the way to the United States Supreme Court. The case was argued in November 2007 and was decided in May 2008. In a split decision, the Court questioned (but did not decide) the constitutionality of disparate taxation for “private activity” bonds that local governments use to subsidize private businesses, but found disparate treatment for bonds issued to fund traditional government services to pass constitutional muster. Read the opinion here.
OSB Antitrust Update Saturday, 08 November, 2008
D&G represents direct purchasers of Oriented Stand Board in a price-fixing class action against OSB manufacturers. The suits name as Defendants nine companies, which together control 95 percent of the OSB market in North America.
HealthSouth $445 Million Settlement Update Saturday, 08 November, 2008
In re HealthSouth Securities Litigation (N.D. Ala.)
D&G served as Liaison Counsel for the Retirement Systems of Alabama and a certified class of other purchasers of HealthSouth bonds.
On July 26, 2010, Judge Karon Bowdre entered final judgments approving the Bondholder Plaintiffs’ settlements with investment bank UBS Warburg for $100 million, and with auditor Ernst & Young for $33.5 million. These settlements bring the total amount recovered for HealthSouth Bondholders to approximately $230 million, and bring the Bondholder litigation to conclusion.
At the final hearing to approve these settlements, the Court said the following to Mr. Guin and the other plaintiffs’ counsel:
And I just want to commend all of you for the way that you have conducted the case.[You] have proved to me that there are ways to conduct complex litigation with lots of lawyers involved and to do so in a professional manner. And I appreciate that very much. (Transcript of July 22, 2010, at 55, lines 2-13)
In 2007, a $445 Million class action settlement was reached with HealthSouth, certain of its former directors and officers, and certain of its insurance carriers. Claim forms have been mailed to all known bond investors. At about the same time, the SEC obtained a $100 million settlement for stock and bond investors.
Fact discovery has been completed in the case, with more than 120 depositions taken. On January 26, 2009, Judge Bowdre denied the investment bank’s renewed motions to dismiss the bond investors’ “scheme” liability claims.
Most recently, on September 30, 2009, Judge Bowdre certified the case to proceed as a class action on behalf of all investors in HealthSouth bonds.
UBS’s petition to appeal that decision to the Eleventh Circuit Court of Appeals has been denied.
David Guin was appointed by the Court to represent HealthSouth Bondholders on the Federal Steering Committee.
For information regarding this litigation, contact David Guin or Tammy Stokes.
Jury Trial Winning Streak Continues Thursday, 08 November, 2007
In the course of six weeks, D&G attorneys won three jury trials in business cases – two for the plaintiff business and one for a defendant business. The cases all involved the proper division of profits from closely held businesses.
Class Certification and denials of motions to dismiss in In re OSB Antitrust Litigation Thursday, 08 November, 2007
OSB is a plywood substitute manufactured by compressing multiple layers of thin wood shavings under intense heat and pressure. The lawsuit alleges that OSB manufacturers reduced OSB production by keeping OSB from the market through mill shutdowns, delaying or canceling construction of new OSB mills and buying OSB from competitors.
Donaldson Guin Wins Business Fraud Lawsuit Thursday, 08 November, 2007
A Jefferson County, Alabama, jury awarded a $225,000 verdict to D&G client AJP, LLC, a company formed by Pravin Patel to purchase a Super 8 Motel in March 2003. During negotiations prior to the purchase, Mohan Patel provided Pravin Patel with copies of purported Profit and Loss Statements for 2001 and 2002. After purchasing the hotel, Pravin Patel learned the 2002 gross room revenue was overstated on the P&L by approximately $86,000.
A jury returned a verdict for $75,000 of compensatory damages and $150,000 of punitive damages. The trial judge entered a judgment based on the jury verdict.
David Donaldson and Dawn Evans represented the Plaintiffs at the jury trial.
Donaldson & Guin Wins Defense Jury Verdict for Business Client Thursday, 08 November, 2007
A Bessemer, Alabama, jury awarded a defense verdict to our client in a case filed in July 2003 by a shareholder of a business operated by our client. The Plaintiffs’ complaint falsely accused our client of a variety of wrongful conduct, including fraud, mismanagement and misappropriation of corporate assets.
$445 Million Settlement With HealthSouth Obtains Court Approval Thursday, 08 November, 2007
On January 8, 2007, Judge Karon Bowdre, U.S. District Judge for the Northern District of Alabama, approved a $445 Million settlement with HealthSouth Corp. and certain of its officers and directors.
