This case was last updated from U.S. District Courts on 06/05/2021 at 11:40:25 (UTC).

McMahon v. Sansone et al

Case Summary

On April 6, 2021, Cynthia McMahon (“Plaintiff”), represented by Brian J. Robbins, Eric M. Carrino and Stephen J. Oddo of Robbins LLP, and John Tate Spragens of Spragens Law PLC, filed a civil action complaint against Guy P. Sansone, Marcus E. Bomley, Frank M. Bumstead, Victoria L. Freed, Rita Johnson-Mills and others (collectively, “Individual Defendants”), seeking declaratory and monetary relief, among other reliefs for the alleged breach of fiduciary duty, alleged waste of corporate assets, alleged unjust enrichment and alleged violation of the federal securities laws. This case was filed in the U.S. District Court for the Middle District of Tennessee with Judges Eli J. Richardson and Alistair Newbern presiding. 

In its complaint, the Plaintiff alleged that “Despite Brookdale’s claims that “you or your loved one can feel at home” and that it provides a “personalized approach,” during the relevant period, the Company understaffed its facilities in an effort to reduce expenses and improve its financial results. Due to the understaffing, the Company received numerous citations and “deficiency reports.” Brookdale was also a defendant in a number of class actions that allege, among other things, that the Company engaged in deceptive and unfair trade practices due to its failure to provide the agreed-upon level of care for its seniors.” Furthermore, “In addition to misleading seniors and their families, Brookdale’s positive statements misled investors. These investors believed that the Company’s financial results were based on legal practices achieved in accordance with Brookdale’s stated priority of keeping seniors safe. This was not the case.” “In response to the Company’s positive financial results, the price of Brookdale common stock traded at artificially inflated prices, reaching as high as $18.20 per share. While Brookdale common stock traded at artificially inflated prices, Individual Defendants between September 2016 and March 2020 caused the Company to repurchase 10.1 million shares of its own common stock for $72 million at these inflated prices.”

The Plaintiff further alleged that “When the truth emerged, the trading price of Brookdale stock collapsed, falling to $3.68 per share on April 29, 2020, wiping out over $102.6 million in once valuable stockholder equity. Worse yet, the Company has been named as a primary defendant in costly and expensive-to-defend class action lawsuits brought by Brookdale stockholders for alleged violations of the federal securities laws. See Posey v. Brookdale Senior Living Inc., et al., No. 3:20-cv-00543 (M.D. Tenn.) (“Securities Class Action”).” Also, “Nevertheless, the Board has not taken any legal action against the directors and officers responsible for this debacle. Nor will they, because each of the director defendants is interested in the outcome of any such legal action.”

There are five claims for relief laid down by the Plaintiff against the individual defendants. The first claim is for the alleged breach of Fiduciary Duty; the second claim is for the alleged waste of corporate assets; the third claim is for the alleged unjust enrichment; the fourth claim is for the alleged contribution under §21D of the Exchange Act; and the fifth claim is for the alleged contribution and indemnification.

In its prayer for relief, the Plaintiff has requested the court to pass a judgment in favor of the Company for the damages sustained; direct Brookdale to take all necessary actions to reform and improve its corporate governance to comply with applicable laws; and grant Extraordinary equitable and/or injunctive relief as permitted by law. The Plaintiff further requested the court to award restitution from defendants; order disgorgement of all profits; and award plaintiff the litigation costs.

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    3:21-CV-00280

  • Filing Date:

    04/06/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Finance - Security/Commodity/Exchange

Judge Details

Presiding Judge

Aleta A. Trauger

 

Party Details

Plaintiff

Cynthia McMahon

Defendants

T. Andrew Smith

Jackie M. Clegg

Lucinda M. Baier

Brookdale Senior Living Inc.

Steven E. Swain

Lee S. Wielansky

Victoria L. Freed

Frank M. Bumstead

Denise W. Warren

Guy P. Sansone

Rita Johnson-Mills

James R. Seward

Marcus E. Bomley

Attorney/Law Firm Details

Plaintiff Attorneys

John Tate Spragens

Eric M. Carrino

Brian J. Robbins

Stephen J. Oddo

Defendant Attorney

Britt K. Latham

 

Court Documents

20 #2

Exhibit Robbins LLP Resume

20 #1

Exhibit Brown Law Firm, PC Resume

#20

#19

#18

#17

#16

#15

#14

#13

#7

#6

#5

#4

#3

#2

1 #1

Attachment - Civil Cover Sheet

#1

10 More Documents Available
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Docket Entries

  • 06/02/2021
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  • Docket(#20) STIPULATION Joint Stipulation and Proposed Order Consolidating Cases and Appointing Co-Lead Counsel and Co-Liaison Counsel by Cynthia McMahon. (Attachments: #1 Exhibit Brown Law Firm, PC Resume, #2 Exhibit Robbins LLP Resume)(Spragens, John) (Entered: 06/02/2021)

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  • 06/01/2021
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  • Docket(#19) NOTICE of Initial Case Management Conference is set for 6/28/2021 at 3:30 PM in Chambers 825 before District Judge Aleta A. Trauger. (kc) (Entered: 06/02/2021)

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  • 06/01/2021
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  • Docket(#18) ORDER: Upon the transfer of this case to Judge Trauger, it is hereby ORDERED that the reference to the Magistrate Judge is WITHDRAWN, and the initial case management conference scheduled before her on June 9, 2021 is CANCELLED. The Clerk shall issue Judge Trauger's standard Notice, setting this case for an initial case management conference before her on June 28, 2021 at 3:30 p.m. Signed by District Judge Aleta A. Trauger on 6/1/2021. (kc) (Entered: 06/02/2021)

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  • 06/01/2021
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  • Docket(#17) ORDER REASSIGNING CASE: It is hereby ORDERED that the Clerk transfer this case to United States District Judge Aleta Trauger, as it is related to an earlier-filed case (3:20-cv-00929) that is assigned to her. Signed by District Judge Eli J. Richardson on 6/1/2021. (kc) (Entered: 06/01/2021)

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  • 06/01/2021
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  • Docket(#16) WAIVER OF SERVICE Returned Executed by Cynthia McMahon. All Defendants. (Oddo, Stephen) (Entered: 06/01/2021)

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  • 05/31/2021

  • DocketTN State Bar status verified as active for Britt K. Latham admitted to this court. (kc) (Entered: 05/31/2021)

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  • 05/27/2021
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  • Docket(#15) NOTICE by Lucinda M. Baier, Marcus E. Bomley, Brookdale Senior Living Inc., Frank M. Bumstead, Jackie M. Clegg, Victoria L. Freed, Rita Johnson-Mills, Guy P. Sansone, James R. Seward, T. Andrew Smith, Steven E. Swain, Denise W. Warren, Lee S. Wielansky Notice of Related Case (Latham, Britt) (Entered: 05/27/2021)

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  • 05/27/2021
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  • Docket(#14) NOTICE of Appearance by Britt K. Latham on behalf of Lucinda M. Baier, Marcus E. Bomley, Brookdale Senior Living Inc., Frank M. Bumstead, Jackie M. Clegg, Victoria L. Freed, Rita Johnson-Mills, Guy P. Sansone, James R. Seward, T. Andrew Smith, Steven E. Swain, Denise W. Warren, Lee S. Wielansky (Latham, Britt) (Entered: 05/27/2021)

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  • 05/20/2021
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  • Docket(#13) ORDER: This matter is set for an initial case management conference on June 9, 2021 at 10:00 a.m. (Doc. No. #4 .) The conference will be held by telephone. Counsel for each party shall call (888) 557-8511 and enter access code 7819165# to participate. Counsel need not and should not appear in person. Signed by Magistrate Judge Alistair Newbern on 5/20/2021. (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(ln) (Entered: 05/20/2021)

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  • 05/05/2021
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  • Docket(#12) ORDER granting #9 : Having satisfied the requirements of Local Rule 83.01(b), the Motion to Appear Pro Hac Vice of Stephen J. Oddo is granted. Signed by Vicki Kinkade, Chief Deputy Clerk, on 5/5/2021. (vk) (Entered: 05/05/2021)

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5 More Docket Entries
  • 04/13/2021
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  • Docket(#7) MOTION for attorney Brian J. Robbins to Appear Pro Hac Vice (paid $150 PHV fee; receipt number 0650-3351402) by Cynthia McMahon. (Spragens, John) (Entered: 04/13/2021)

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  • 04/08/2021

  • DocketNOTICE TO COUNSEL Brian J. Robbins, Stephen J. Oddo, and Eric M. Carrino: WITHIN 21 DAYS, counsel shall file a Motion to Appear Pro Hac Vice, a Certificate of Good Standing signed by the Clerk of a United States District Court or a U. S. appellate court where admitted, and pay a fee of $150.00 (LR 83.01(b)). PHV due by 4/29/2021. (kc) (Entered: 04/08/2021)

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  • 04/08/2021

  • DocketCA State Bar status verified as active for Brian J. Robbins, Stephen J. Oddo, and Eric M. Carrino not admitted to this court - Local counsel secured. (kc) (Entered: 04/08/2021)

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  • 04/08/2021

  • DocketTN State Bar status verified as active for John Tate Spragens admitted to this court. (kc) (Entered: 04/08/2021)

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  • 04/08/2021
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  • Docket(#6) ORDER: This case is REFERRED to the Magistrate Judge for customized case management in accordance with Local Rule 16.01 and 28 U.S.C. 636(b)(1)(A). Signed by District Judge Eli J. Richardson on 4/8/2021. (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(kc) (Entered: 04/08/2021)

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  • 04/07/2021
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  • Docket(#5) Summons issued as to Lucinda M. Baier, Brookdale Senior Living Inc., Frank M. Bumstead, and Rita Johnson-Mills. (Service packet returned to counsel by regular mail.) (kc) (Entered: 04/07/2021)

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  • 04/07/2021
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  • Docket(#4) NOTICE of Initial Case Management Conference is set for 6/9/2021 at 10:00 AM in Courtroom 774 before Magistrate Judge Alistair Newbern. (kc) (Entered: 04/07/2021)

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  • 04/07/2021
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  • Docket(#3) NOTICE of Business Entity Disclosure Statement filing requirement. (kc) (Entered: 04/07/2021)

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  • 04/07/2021
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  • Docket(#2) NOTICE/INFORMATION regarding Consent of the Parties to the Magistrate Judge. (kc) (Entered: 04/07/2021)

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  • 04/06/2021
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  • Docket(#1) COMPLAINT against Lucinda M. Baier, Marcus E. Bomley, Brookdale Senior Living Inc., Frank M. Bumstead, Jackie M. Clegg, Victoria L. Freed, Rita Johnson-Mills, Guy P. Sansone, James R. Seward, T. Andrew Smith, Steven E. Swain, Denise W. Warren, and Lee S. Wielansky (Filing fee $402, Receipt number 0650-3347684), filed by Cynthia McMahon. (Attachments: #1 Attachment - Civil Cover Sheet)(kc) (Entered: 04/07/2021)

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