7 Hot Health Care Industry Sectors for Investment, Growth & Consolidation in 2020

Guest post by attorneys at Epstein Becker & Green, P.C.

Based on their extensive experience advising health care industry clients, Epstein Becker Green attorneys and strategic advisors from EBG Advisors are predicting the “hot” health care sectors for investment, growth, and consolidation in 2020.  These predictions for 2020 are largely based on the increasing confluence of the following three key “drivers” of health industry transformation that is substantially underway:

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CCPA: The next horizon for M&A deals in California and beyond

Guest post by Jennifer Post and Luke Sosnicki of Thompson Coburn LLP

The California Consumer Privacy Act (CCPA) takes effect on January 1, 2020. Private litigants may begin to bring lawsuits under the CCPA for data breaches the same day. California’s Attorney General will begin enforcing the CCPA in its entirety six months later on July 1, 2020.

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Private Equity in Franchising

Guest post by Nick Jones, R. James Straus and Jason C. Williams of Frost Brown Todd LLC

Private equity (“PE”) involvement in the franchising world has increased in recent years. Though historically PE firms have focused primarily on investment in franchisors, PE firms have in recent years increased their focus on franchisee-side investment. Understanding the franchisor’s perspective on PE investment into its franchisee community can help PE firms more effectively negotiate their relationship with the franchisor.

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How to assure a successful physician practice investment or acquisition

Guest post by Patricia S. Hofstra of Duane Morris LLP

As physician practices, health care entities, private equity and venture capital firms consider physician practice investments and acquisitions, the players need to address the unique nature of physicians and physician practices in order to assure a successful deal. Peter Drucker is quoted as saying that “Only three things happen naturally in organizations: friction, confusion and underperformance. Everything else requires leadership.” With respect to physician practice investments and acquisitions, communication is key to the ultimate success of the transaction.

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Recent Delaware Cases Reinforce Director Accountability for Risk Oversight

Guest post by attorneys at Davis Polk & Wardwell LLP

Recent Delaware Decisions Focus on Director Oversight Liability

Two recent Delaware decisions may give ammunition to stockholder plaintiffs seeking to assert claims against directors under a Caremark theory for failing to comply with their oversight obligations. The decisions—Marchand v. Barnhill (“Blue Bell”) and In re Clovis Oncology, Inc. Derivative Litigation—make clear that courts will not give business-judgment rule deference when presented with allegations that directors acted in bad faith by failing to implement or monitor systems of oversight. Although each case was before the courts on a motion to dismiss and therefore did not finally adjudicate the question of director liability, each decision undoubtedly strengthens the plaintiff’s hand in settlement negotiations needed to avoid trial. Importantly, because these claims are for breaches of the duty of loyalty, directors face the risk of personal liability without the protection of exculpation or indemnification, or possibly even D&O insurance coverage.

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Pension Plan Withdrawal Liability Presents A “Risky Gambit” to Private Equity Funds

Guest post by Michael T. Bindner of Frost Brown Todd LLC

A Federal District Court recently called investments in private companies that participate in a multiemployer pension plan (MPP) a “risky gambit” because of the potential for exposing the MMP’s investors to withdrawal liability[1]. This type of liability is sometimes referred to as a “hidden liability” because, in some situations, investors may have exposure for the liability even if they did not affirmatively assume the liability under a purchase agreement.

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