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1
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PLAINTIFFS ANSWERING BRIEF IN RESPONSE TO DEFENDANTS MOTION TO DISMISS OR STAY
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EXTRACTED KEY WORDS
APPOINTMENT JINKS ANNUAL MEETING COURT BACON DEFENDANTS DELAWARE PHYAMERICA BUYOUT DIRECTORS CONSOLIDATE NORTH CAROLINA DEL MOTION SEEKING CHANCERY PENDING COUNSEL DISMISS LIEBESMAN AFFIDAVIT SCOTT FRED JINKS ERNEST BACON RESPECTING SHAREHOLDERS BY-LAWS COMPEL EXHIBIT EXPEDITE |
ORIGINAL
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY P
CHARLES R. BOSCO and MICHAEL D.
MCGEE, individually, and on
behalf of all those similarly
situated,
C.A. No. 18527-NC
Plaintiffs,
V.
STEVEN M. SCOTT, BERTRAM E. WALLS,
EUGENE F. DAUCHERT, JR.,
EDWARD L. SUGGS, JR., CHARLES E.
POTTER, SHERMAN M. PODOLSKY,
FRED JINKS, ERNEST BACON, and
PHYAMERICA PHYSICIAN GR.OUP, INC.,
a Delaware corporation,
Defendants
PLAINTIFFS' ANSWERING BRIEF IN RESPONSE TO DEFENDANTS'
MOTION TO DISMISS OR STAY
Plaintiffs, Charles R. Bosco and Michael D. McGee, by and through their undersigned
counsel, respectfully respond to defendants' motion to dismiss or stay as follows:
BtELIMINARY STATEMENT
By way of this action, shareholders of PhyAmerica Physicians Group, Inc.
("PhyAmerica" or the "Company") are challenging an attempt by Steven M. Scott ("Scott"), the
CEO, Chairman and President of PhyAmerica, to cash-out the minority shareholders of
PhyAmerica in a grossly and blatantly unfair transaction (the "Buyout") valued at only $6.42
million.' Plaintiffs also challenge the September 19,2000, appointment of two new directors of
the Company, Fred Jinks and Ernest Bacon, because under the Company's by-laws, Jinks and
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2
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DEFENDANTS OPENING BRIEF IN SUPPORT OF MOTION TO DISMISS OR STAY
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EXTRACTED KEY WORDS
DELAWARE DEFENDANTS DEL PLAINTIFFS FEDERAL ACTION SLIP NORTH CAROLINA JINKS BACON CHARLES BOSCO DISMISS COMPLAINT DAUCHERT AFF MCGEE DELAWARE LAW PHYAMERICA WITNESSES DIRECTORS TRANSACTIONS FRED JINKS ERNEST BACON SUBSTANTIALLV UNITED STATES DISTRICT FIRST-FILED ACTION COMPULSORY PROCESS NCFE DOCTORS HEALTH PLAN GREENSBORO |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR .NEW CASTLE COUNTY
CHARLES R. BOSCO and MICHAEL D.
MCGEE, individually, and on behalf of all ;
those similarly situated,
;
Plaintiffs, >
V. ; CA. No. 18527NC -0
f"`? 0
> r?c:: - -
ry- )
STEVEN M. SCOTT, BERTRAM E. WALLS, ) `_.,
._:. ;:-f
-i.:...
i.. _ _
EUGENE F. DAUCHERT, JR., EDWARD I,. ) ,i:-;
-7.
SUGGS, JR., CHARLES E. POTTER, y .,.. c-1 :
SHERMAN M. PODOLSKY, FRED JINKS, `1: ^
; 1 ,. ~. I_
... ..
ERNEST BACON, and PHYAMERICA r- ~,
PHYSICIAN GROUP, INC., a Delaware c:;, `>
; -.`A
.< -
corporation, -7' a
-<
;
Defendants. >
DEFENDANTS' OPENING BRIEF IN SUPPORT
OF THEIR MOTIQN TO DISMISS OR STAX
Alan J. Stone
OF COUNSEL: S. Mark Hurd
Yvette Fitzgerald
William K. Davis Morris, Nichols, Arsht & Tunnel1
Alan M. Ruley 1201 North Market Street
Bell, Davis & Pitt, P.A. P.O. Box 1347
Century Plaza Wilmington, DE 19899
100 North Cherry Street, Suite 600 (302) 575-7354
Winston-Salem, NC 27101 Attorneys for Bertram E. Walls, Eugene F.
(336) 722-3700 Dauchert, Jr., Edward L. Suggs, Jr.,
Charles E. Potter and Sherman M. Podolsky
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3
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PLAINTIFFS MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR EXPEDITED PROCEEDINGS
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EXTRACTED KEY WORDS
SHAREHOLDERS PLAINTIFFS MEETING TRANSACTIONS PHYAMERICA COURT CONTROL ASSETS DELAWARE RECEIVER MINORITY SHAREHOLDERS DEFENDANTS JINKS BACON MAJORITY CONTROL SELF-DEALING COMMON STOCK FIDUCIARY DUTY NCFE MISREPRESENTING APPOINTMENT SCOTT STRIPS PRELIMINARY INJUNCTION RECEIVABLES PREFERRED SHARES EXPEDITED PROCEEDINGS MANIPULATES UNFAIR RELATED-PARTY DELAWARE CHANCERY COURT |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE A
IN AND FOR NEW CASTLE COUNTY I/'
CHARLES, R. EiOSCO and Ml.CHAEL D. C.A.No.
MCGEE, in.dividually, and on
behalf of all those similarly
situated,
Plaintiffs,
v.
STEVEN Id. SCOTT, BERTRAM E. WALLS,
EtiGENE I;. DAUCHERT, JR.,
EDWARD i. SUGGS, JR., CHARLES E.
POTTER, SHE1~MA.N M. PODOLSKY,
FRED JINKS, ERNEST BACON, and
PHYAMERICA PHYSICIAN GROUP, INC.,
a Delaware corporation,
Defendants
PLAINTIFFS' MEMORANDUM OF LAW
IN SUPPORT OF
---__ TgI3t MOTION FOR EXPEDITED PROCEEDINGS
Dated: November 28, 2000 Jay W. Eisenhofer
Cynthia A. Calder
Sidney S. Liebesman
GRANT & EISENHOFER, P.A.
1220 North Market Street, Suite 500
Wilmington, Delaware 19801
(302) 622-7000
Fax: (302) 622-7100
Attorneys for Plaintiffs
TABLE OF CONTENTS
TABLE CF AUTHORITIES . . . . . . . . _ , , . . . . . . .
SNIPPETS:
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4
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COMPLAINT
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EXTRACTED KEY WORDS
PHYAMERICA PLAINTIFFS SHARES DEFENDANTS NCFE MCGEE INDIVIDUA BACON SHAREHOLDERS DIRECTORS DELAWARE MERGER COMMON STOCK RECEIVABLES CLASS ACTION COMPLAINT OUTSTANDING ERNEST BACON PHYAMERICA PHYSICIAN GROUP ANNUAL MEETING TRANSACTION FINANCIAL RECORDS APPOINTMENTS AFFILIATES PRIOR BOARD FRED JINKS HEALTHCARE REPRESENTATIVES PREFERRED SHARES ACQUISITION |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
CHARLES R. BOSCO and MICHAEL D. > C.A.No.
MCGEE, individually, and on
behalf of all those similarly
situated, CLASS ACTION COMPLAINT
>
Plaintiffs, 1
V.
STEVE?< M. SCOTT, BERTRAM E. WALLS,
EUGENE F. DAWCHERT, JR.,
EDWARD L. SUGGS, JR., CHARLES E.
POTTER, SHERMAN M. PODOLSKY,
FRED IINKS, ERNEST BACON, and
PHYAMERICA PHYSICIAN GROUP, INC.,
a Delaware corporation,
Defendants
VERIFIED CLASS ACTION COMPLAINT
Plaintiffs, Charles R. Bosco and Michael D. McGee, and all others similarly situated by and
through plaintiffs' undersigned attorneys, as and for their Class Action Complaint herein allege,
upon knowledge as to themselves and their own actions, and upon information and belief as to all
other matters, as follows:
NATURE OF ACTION
1. This indiviclual and class action challenges the proposed $2.76 million cash-out
merger and privatization ("Buyout") of PhyAmerica Physician Group, Inc. ("PhyAmerica" or the
"Company") by defendant Steven M. Scott ("Scott"), the CEO, Chairman and President of
PhyAmerica. Scott owns 57% of PhyAmerica's outstanding shares, although he obtamed majority
contra, of the Company through a series of improper and unlawful maneuvers following his being
ousted as CEO .by a prior board of directors for self-dealing and mismanagement. Following his
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