Dentsply International (NSDQ:XRAY) sued the law firm that represented it in a breach-of-contract lawsuit filed against it by Guidance Endodontics that wound up costing Dentsply more than $15 million.
Guidance sued Dentsply for breach of contract in 2008 over a supply deal for dental obturators, endodontic files and ovens. The case went to trial in the fall of 2009, with Thomas Gulley of the firm Lewis & Roca representing Dentsply. The jury returned a verdict against the York, Pa.-based dental devices maker, awarding more than $4 million for the breach of contract, punitive damages of $40 million and legal fees of more than $3.5 million, according to court documents. The judge in the case later reduced the punitive damages to $4 million, according to the documents.
Now Dentsply wants the law firm to pony up $15 million in compensatory damages for its alleged malpractice, arguing that Lewis & Roca and Gulley "failed to develop a theory of the case prior to trial," "failed to conduct adequate and appropriate discovery," "failed to retain appropriate experts or elicit necessary expert
testimony," "failed to object to erroneous jury instructions and invited error," "failed to make appropriate motions" and "failed to preserve key issues for appeal," according to the lawsuit.
"As a direct and proximate result of defendants’ professional negligence, breach of contract, and breaches of the applicable standard of care and fiduciary duties, Guidance obtained a verdict against clients in excess of $44 million dollars, and clients sustained damages in excess of $15 million dollars," according to the suit.
Hansen adjusted its books in 2009 after receiving an anonymous tip that "documentation related to certain revenue transactions was falsified, and there was not an effective control environment in our sales, clinical and field service departments," according to regulatory filings. The company had recognized revenues for the sale of 2 of its Sensei robotic surgery systems but had in fact received only $320,000.
"As a result, there were instances where revenue was recognized prior to the completion of all of the elements required for revenue recognition under our revenue recognition policy. All of the irregularities that were identified during the investigation occurred outside of the accounting department," according to the filings.
The restatement pushed Hansen’s losses during the 3 months ended Sept. 30, 2008, from $12.0 million, or 48 cents per share, to $12.9 million, or 51 cents per share.
Shareholder lawsuits soon followed, alleging that the company and its management "made false and/or misleading statements and/or failed to make disclosures regarding our financial results and compliance with [generally accepted accounting principles] while improperly recognizing revenue; that these misstatements and/or non-disclosures resulted in overstatement of our revenue and financial results and/or artificially inflated our stock price; and that following our October 19, 2009 announcement, the price of our stock declined," according to filings with the SEC.
HNSN shares plunged 9% that day, from an Oct. 16, 2009, close of $3.43 to end the next day at $3.12.
Now the company says it’s agreed to cover the plaintiffs’ legal fees, to the tune of $300,000, and institute safeguards to prevent a recurrence of the problem. Read more
DePuy Pinnacle lawsuits top 900
More than 900 personal injury lawsuits have been filed over a hip implant made by Johnson & Johnson (NYSE:JNJ) subsidiary DePuy, according to a law firm representing some of the plaintiffs.
The cases were filed over DePuy’s Pinnacle metal-on-metal hip replacement implant, which been found to shed minute particles of metal as the hip’s ball joint wears on its metal cup. The lawsuits allege that increases the risk of problems and make the implants prone to early failure.