In re RehabCare Group, Inc., Shareholders Litigation

On March 9, 2011, Labaton Sucharow was appointed co-lead counsel for co-lead plaintiff Norfolk County Retirement System, in In re RehabCare Group, Inc., Shareholders Litigation, C.A. No. 6197-VCL (Del. Ch.).

The case arises out of the proposed acquisition of RehabCare Group, Inc. ("RehabCare") by Kindred Healthcare, Inc. ("Kindred"). Under the terms of the merger agreement, RehabCare shareholders were to receive merger consideration consisting of $26.00 in cash and 0.471 shares of Kindred common stock (the "Proposed Transaction"). The complaint alleged that the merger price undervalued RehabCare, as the Company was poised for growth and the Proposed Transaction was agreed to before the potential growth could be realized. The complaint also alleged that the board of directors of RehabCare breached its fiduciary duty to obtain the best value for RehabCare shareholders, by, among other things, engaging a conflicted financial advisor to render an opinion on the financial fairness of the Proposed Transaction that was also providing financing to the acquiror, Kindred.

On June 29, 2011, the parties filed a Stipulation of Settlement with the Court, memorializing the terms of the settlement. The settlement provided for payment of $2.5 million in cash into a settlement pool for the benefit of the plaintiff class in the Action, changes to the merger agreement to allow another potential bidder to come in and amendment of the merger agreement to include additional disclosures, as also set forth in an SEC 8-K filing.