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Summary judgment granted for managed care company

February 4, 2008

In connection with a managed care company's (our client) 2005 acquisition of another managed care company, our client terminated the employment of the CFO of the acquired company. The CFO claimed that by virtue of the language of his employment agreement, he was entitled to multiple severance payments under two provisions of his contract. Our client believed he was only entitled to a severance pursuant to a “change in control” provision triggered by virtue of the acquisition. Attached to the CFO's complaint was a statement from the acquired company's former CEO and signatory to the employment agreement. He agreed with the CFO's interpretation of the agreement. The CFO asserted that this statement was a binding judicial admission that his position was correct. In August, the court ruled in favor of our client and granted summary judgment. We convinced the court to agree with our client's interpretation of the contract, and to disregard the former CEO’s statement as a non-binding legal conclusion. The judgment saved our client more than $5 million in disputed payments.