Case Page

 

Case Status:    ONGOING    
On or around 07/11/2018 (Ongoing date of last review)

Filing Date: July 10, 2018

According to the Complaint, Mednax, Inc. ("Mednax" or the "Company") acquires physician practice groups and then provides those physicians with administration services. As part of the acquisition process, the affiliated physicians agree to employment contracts with Mednax, which provide for a base salary and incentive bonuses, having terms of three to seven years. In exchange, Mednax handles billing patients and third-party payors for services rendered by the affiliated physicians.

The Company’s “roll-up” business strategy focuses on acquiring physician groups in subspecialties such as anesthesia, newborn, maternal-fetal, radiology and teleradiology, and pediatric cardiology. Historically, the main driver of Mednax’s revenue growth has been acquisitions of anesthesiology practice groups. In 2016, Mednax added 13 physician groups through acquisitions, including eight anesthesiology practices, and concluded that year with a total of 1,390 affiliated anesthesiologists.

On July 11, 2018, Plaintiff's law firm issued a press release announcing the lawsuit. According to the press release, the Complaint alleges that during the Class Period, Mednax violated the Exchange Act by misleading investors regarding the sustainability of the Company's business model. Throughout the Class Period, Mednax's business model depended upon growth from the acquisition of new practice groups, primarily in anesthesiology. In truth, Mednax's business model is not sustainable and its growth was based upon suppressing physician compensation and enforcing non-compete agreements to deter physician defections. When the truth regarding the sustainability of Mednax's business model was finally revealed at the end of the Class Period, the price of the Company's stock had declined by over 23%.

COMPANY INFORMATION:

Sector: Services
Industry: Business Services
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: MD
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. Florida
DOCKET #: 18-CV-61572
JUDGE: Hon. William P. Dimitrouleas
DATE FILED: 07/10/2018
CLASS PERIOD START: 02/04/2016
CLASS PERIOD END: 07/27/2017
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bernstein Litowitz Berger & Grossmann LLP (New New York)
    1251 Avenue of the Americas, Bernstein Litowitz Berger & Grossmann LLP (New New York), NY 10020
    (212) 554-1400 (212) 554-1448 ·
  2. Klausner, Kaufman, Jensen & Levinson
    10059 Northwest 1st Court, Klausner, Kaufman, Jensen & Levinson, FL 33324
    954.916.1202 954.916.1232 ·
No Document Title Filing Date