Learn how Withum helped a group of physician claimants in a contentious dispute leading to a favorable ruling based on Withum’s conclusions.
Executive Summary
Counsel engaged Withum on behalf of five physician claimants to determine certain economic damages to which the claimants were entitled from their prior practice, in accordance with the terms of the practice’s Operating Agreement. Withum’s analysis of the damages owed to the claimants focused primarily on unpaid distributions, unpaid deferred compensation and consideration relating to the buyout value of each claimant’s ownership interest in the practice.
The Client
A six-member orthopedic and sports medicine practice with five locations across New Jersey and an annual revenue of approximately $20 million.
The Challenge
The split-up of the practice’s owners was far from amicable, and the founding member refused to make distributions despite maintaining a considerable cash balance on hand from which distributions could have been paid. In addition, the adversary employed a well-known industry expert who developed theories that espoused reasons not to pay distributions and minimized the buyout value for the physician claimants.
The Approach And Solution
The Operating Agreement dictated how profits were to be distributed and delineated how any buyout amounts were to be calculated. Withum’s in-depth financial analysis not only revealed that the practice was sitting on undistributed profits, but it also undercut the argument of the adversary’s expert that the claimants owed damages.
The Outcome
After the completion of expert reports, depositions and testimony, the arbitrator ruled in favor of Withum’s clients and awarded them approximately 95% of the overall conclusion of damages. This amount was well in excess of the findings rendered by the adversary’s expert.
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