A privately held home healthcare company acquired a similar company operating in Arizona as part of its national roll-up strategy. Following the acquisition, key employees of the acquired company left and took a significant portion of the company’s existing patient volume. Further, certain licenses were not maintained through the transaction, resulting in a situation where the company provided services for which it did not have licenses, and for which it was not able to obtain insurance reimbursement. As a consequence, the buyer filed suit seeking damages for alleged breaches of representations and warranties in the purchase agreement regarding the status of key employees and the status of state licenses.
Baker Tilly was retained by counsel for the buyer to analyze and quantify lost profits arising from alleged breaches of the seller’s representations and warranties associated with the acquisition. In doing so, we coupled our significant healthcare industry experience with our expertise in damage analysis to build a credible model that quantified the lost profits sustained by the buyer.
Our assessment of the damages was beneficial to counsel in settling the matter before trial.
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