Following a two-week bench trial before Justice O. Peter Sherwood of the New York Supreme Court, Dechert achieved a victory today on behalf of Rubin Schron and Cammeby’s Equity Holdings with the court’s ruling that Cam Equity may acquire SavaSeniorCare LLC, a national nursing-home company, through the assumption of $100 million in outstanding debt. In so doing, Justice Sherwood rejected the claims of Sava’s owners, Leonard Grunstein and Murray Forman, that Schron had fallen $120 million short on his lending commitments as a “prevarication” and concluded that the “mendacity of Grunstein and Forman” entitled their story to be given no weight.
In its decision, the court ruled that Cam Equity “is entitled to reap the benefit of its bargain now” and ordered Grunstein, Forman, and their companies “without further delay” to move forward with transferring control of the company to Cam Equity.
The trial ruling represents the latest victory for Dechert in its longstanding representation of Schron, Cam Equity and affiliated companies in litigation regarding the control of a multi-billion nursing-home company and related fiduciary duty and malpractice claims brought by Schron against the operating company’s owners and Schron’s former attorneys and investment banker.
The victory follows a series of rulings that Dechert has won on behalf of Cam Equity and affiliated companies in seeking to vindicate their rights to acquire SavaSeniorCare and two other nursing-home companied controlled by Grunstein and Forman. Previously, the New York Supreme Court’s Appellate Division, First Department, affirmed an earlier victory before the New York Supreme Court (Commercial Division) upholding the validity of the Sava option. The First Department issued an order resolving another Schron-related lawsuit, concerning a separate option that a Schron company, Cammeby’s Funding LLC, has to acquire one-third of the shares of Fundamental Long Term Care Holdings LLC. The New York Supreme Court has also granted summary judgment in favor of Cam Equity’s right to acquire two-thirds of Mariner Health Care, Inc.
“We are extremely pleased with the court’s decision,” said Dechert chairman and litigation partner Andrew J. Levander, who led the representation of Schron and Cam Equity along with partner Steven A. Engel. “Today’s ruling confirms that Mr. Schron fulfilled all of his commitments in connection with these transactions and squarely rejects the incredible stories that the defendants have advanced to obstruct Mr. Schron’s contractual rights. Per the court’s decision, Cam Equity should now be able to move forward with acquisition.”
