Seniors Scammed: Dallas CBS Affiliate Produces Story About Brewer Storefront Client

September 25, 2024 – CBS News Texas reports on how Brewer Storefront assisted client Shirley Ison–Newsome, 77, after she was the victim of a predatory financial scam like many seniors face. 

The investigation, “Caught in the Scam,” reports Ms. Ison-Newsome lost more than $50,000 after her bank, Chase, allegedly failed to warn her of fraudulent activity. She also said a bank employee at her local Chase branch promised her that her wire transfer to China had been caught and stopped in time, but days later she learned the financial transaction had gone through.  

With the help of the Brewer Storefront, the community service affiliate of Brewer, Attorneys & Counselors, Ison-Newsome resolved a legal action with Chase to the satisfaction of the parties.  

"It can't be that at the end of the day that it is just too bad, especially when, importantly, [Ison-Newsome] was extremely vigilant,” said Brewer Partner Will Brewer IV. “She immediately alerted her trusted financial institution. That's everything that you would expect someone to do to fix the situation." 

Free Speech Group Supports NRA

August 19, 2024 – Law360 reports on an amicus brief filed by the Foundation for Individual Rights and Expression (FIRE) in support of Brewer client the National Rifle Association of America (NRA). As reported, “A former New York state official isn't immune from the National Rifle Association’s suit claiming she violated the group's rights by pressuring financial institutions to cut ties with it, a free speech group told the Second Circuit on Monday, citing a recent U.S. Supreme Court decision in the dispute.”

The report says that, in an amicus brief filed in support of the NRA, FIRE said granting former New York Department of Financial Services Superintendent Maria T. Vullo qualified immunity “would telegraph just how officials can avoid constitutional limits by slightly modifying or softening their coercive statements.”

In a unanimous decision in May, the U.S. Supreme Court said the NRA plausibly alleged that Vullo violated the group’s First Amendment rights by coercing DFS-regulated banks and insurers into cutting ties with the NRA. The NRA and Vullo filed Supplemental Letter Briefs on July 29, 2024.

To read more, click here.

The New York Times Reports on Brewer Trial Win

July 29, 2024 – The New York Times reported today on the National Rifle Association of America’s (NRA) trial outcome in Manhattan, calling the verdict a “win” that represents “the beginning of the end of a four-year-old case” brought by the New York Attorney General (NYAG). As reported in the article, “Judge Lets NRA Keep Its Independence but Pushes for Reforms,” the NYAG was seeking the appointment of a court-appointed monitor over the NRA.

As reported, “…Justice Joel M. Cohen of Manhattan Supreme Court said he wanted further assurances that the NRA would reform its governance practices.” The Times reports, “The NRA has held off the most severe regulatory outcomes. Even before the trial, it persuaded Justice Cohen to reject Ms. James’s attempt to dissolve the group, which she referred to as a ‘terrorist organization’ when she was running for office. And on Monday, the NRA beat back her effort to impose a court-appointed monitor who would have had broad authority over its finances and practices.”

William A. Brewer III, the NRA’s lead outside counsel, said Monday’s developments “validate the NRA’s reform efforts and commitment to good governance — and recognize the First Amendment stakes of this case.”

Read more here.

New York Sun Editorial Highlights NRA Legal Success

August 1, 2024 – The New York Sun published an editorial today, “New York’s Gift to the NRA,” that chronicles the “volley of victories” achieved by Brewer client, the NRA. The editorial reports that a New York judge “rebuffed the effort by Attorney General Letitia James to impose a ‘monitor’ on the NRA, which she’d earlier sought to dissolve.”

The editorial also comments on the NRA’s recent unanimous victory before the U.S. Supreme Court – in response to a financial “blacklisting campaign” undertaken by former New York state financial regulator Maria Vullo.

The Sun writes, “These victories couldn’t be more timely” as America nears the upcoming election.

Brewer Client NRA Emerges From Trial Proceedings Without Monitor, Positioned for Future

July 29, 2024 – Brewer client the National Rifle Association of America (NRA) today commented on the conclusion of trial proceedings in New York Attorney General (NYAG) Letitia James’ lawsuit against the Association – announcing it emerged from the proceedings without the appointment of a monitor and remains positioned for a bright future.

Four years ago, the NYAG filed a “dissolution lawsuit” against the NRA – a case that sought to shut down the Association and seize its assets. Today, New York State Supreme Court Justice Joel M. Cohen in Manhattan rejected the NYAG’s demands for a compliance monitor and instead recommended the NRA and NYAG confer to consent to further governance reforms. In accordance with the court’s direction, the NRA will suggest additional reforms in furtherance of its ongoing commitment to good governance.

The NYAG sought something vastly different: a “monitor” that would have been an invasive and crippling remedy with financial oversight, access to employees and records, and an open line of communication with the NYAG. That proposal was rejected by the court.

“Key facts and a chorus of voices established that the relief sought by the NYAG was unwarranted,” says NRA counsel William A. Brewer III. “The NRA organized its defense around an important reality: there was no evidence the NRA Board of Directors condoned the violations in question; instead, the board acted when it became aware of deviations from its own controls. That said, the Association takes seriously its commitment to stay in strict compliance with all controls.”

Joining Brewer in representing the NRA were partners Sarah B. Rogers, Svetlana M. Eisenberg, and Noah B. Peters.

Read reporting on the court's ruling from Courthouse News, Law360, and The New York Times.

Third Lawsuit Claims Biote CEO, Chairman, Aided by Law Firm, Conspired to Direct BioTE Holdings, LLC into SPAC Transaction to Enrich Themselves

July 16, 2024 – A third lawsuit filed by Brewer, Attorneys & Counselors alleges that company executives from Irving-based Biote Corp. – aided by the Cooley LLP law firm – breached their duties to plaintiffs by channeling the hormone therapy company into a value-destructive special purpose acquisition company (“SPAC”) transaction.

The lawsuit was filed by co-trustees of The Yosaki Trust and The Mioko Trust, Russell J. Miller and Mary Miller, on July 12, 2024, in the Court of Chancery of the State of Delaware.

The suit was brought against Biote CEO Teresa “Terry” Weber, Executive Chairman Marc Beer, Mary Elizabeth Conlon, Haymaker Sponsor III LLC, Steven J. Heyer, and Cooley LLP. Haymaker was the SPAC company that acted as the sponsor of the transaction and Cooley acted as outside counsel. The complaint states that the Cooley firm acted in aiding and abetting defendants’ breaches of their fiduciary duties.

The lawsuit alleges that “The Insider Defendants conspired to close this disastrous transaction to divert approximately $70 million of merger consideration to themselves and gain control of an enterprise they did not build. Plaintiffs respectfully request that the Court order Defendants to disgorge their ill-gotten gains.”

The filing follows a recent settlement with shareholder Marci Donovitz over similar issues.

As explained in the filing, a SPAC – also known as a “blank check company”—is a shell company set up by a sponsor that goes public without an operating business to raise funds, but with a plan to find a target private company with an operating business with which it would merge within a fixed period, usually two years.

“Our clients believe this case reveals a startling fact – company insiders worked with a blank check company and a law firm to enrich themselves and dilute the ownership interest of others,” says William A. Brewer III, partner at Brewer, Attorneys & Counselors, and counsel to plaintiffs.

The lawsuit alleges that plaintiffs’ ownership was diluted and devalued by the transaction, which enriched defendants at the expense of the legacy owners – plaintiffs bring the action to recover damages caused by the “disloyal fiduciaries, and those who aided them.”

As  publicly reported, Biote was a recent defendant in a separate lawsuit filed by Biote founder and Brewer client Dr. Gary Donovitz regarding the SPAC deal. As reported, in February 2024, Biote disclosed it agreed to buy back nearly $77 million of Dr. Donovitz’s stock to settle the matter. In July 2024, it was reported that Biote reached a $60 million settlement with another shareholder Marci Donovitz, also a Brewer client.

Bloomberg Law and The Dallas Morning News Report on $60 Million Shareholder Settlement with Biote

July 8, 2024 – Bloomberg Law and The Dallas Morning News report that Biote reached a $60 million settlement with Brewer, Attorneys & Counselors client and Biote shareholder Marci Donovitz in a lawsuit over its merger with a special purpose acquisition company, also known as a “SPAC” or “blank check company.”

Bloomberg Law reported that Donovitz alleged her shares in the hormone therapy company were diluted by the deal. The article reported that the company will buy back her shares over a three-year period, with $30 million paid upfront. Bloomberg reports that the lawsuit filed in Delaware Chancery Court alleged that Biote company insiders benefited from the transaction with Haymaker Acquisition Corp. III that delivered almost no cash to the company.

“This settlement validates our client’s claim that the transaction was a scheme to enrich a few company ‘insiders’ – and reward them with financial and managerial benefits to which they were not entitled,” William A. Brewer III, a partner at the Brewer firm, said in a statement quoted in the media reports.

The Morning News report noted that as part of the settlement, Biote will be forced to repurchase all 8.3 million of Donovitz’s shares at $7.23 each.

The Morning News article observes that SPACs were once a very popular way for companies to go public but have faced scrutiny from the Securities and Exchange Commission in recent years.

Read the Bloomberg Law report here and The Dallas Morning News report here.

Biote Shareholder Achieves $60 Million Settlement of Breach of Fiduciary Duty Claims

July 3, 2024 – Brewer, Attorneys & Counselors announced today that its client, Marci Donovitz, reached a $60 million settlement with the company. The settlement resolves a lawsuit alleging that Biote executives breached their fiduciary duties by channeling the hormone therapy company into a speculative transaction with a special purpose acquisition company (“SPAC”) which provided almost no cash for the merger.

The lawsuit was filed by Ms. Donovitz on June 5, 2024, against defendants Biote CEO Teresa “Terry” Weber, Biote Executive Chairman Marc Beer, Biote General Counsel Mary Elizabeth Conlon, Haymaker Sponsor III LLC, Steven J. Heyer, and Cooley LLP. Haymaker was the SPAC sponsor for the transaction and Cooley advised those involved with the deal. Ms. Donovitz is the trustee of the Donovitz Family Irrevocable Trust and a BioTE Holdings, LLC shareholder.

The lawsuit alleged that “Defendants knew for months that astronomical redemptions would eviscerate almost all the cash raised by the SPAC and would cause the transaction to be destructive of value. Nonetheless, Defendants proceeded with their scheme to enrich themselves.” The lawsuit further alleged that as part of the transaction, defendants improperly diverted $70 million from the deal to Biote executives and $135 million in cash and stock in total to all defendants.

“This settlement validates our client’s claim that the transaction was a scheme to enrich a few company ‘insiders’ – and reward them with financial and managerial benefits to which they were not entitled,” says William A. Brewer III, partner at Brewer and counsel to Ms. Donovitz. “Our client hopes this outcome lights a path for those victimized by similar deals. This case underscores the rights of those too often viewed as pawns in these speculative pursuits.”

As explained in the underlying lawsuit, filed in The Court of Chancery of The State of Delaware, a SPAC – also known as a “blank check company” – is a shell company set up by a sponsor that goes public without an operating business to raise funds, but with a plan to find a target private company with an operating business with which it would merge within a fixed period, usually two years.

Ms. Donovitz is the ex-wife of Biote founder Dr. Gary Donovitz, who the lawsuit contends was tricked into waiving a minimum cash closing condition just days before the SPAC deal was completed on May 26, 2022.

As has been publicly reported, Biote was a defendant in a separate lawsuit filed by Dr. Donovitz regarding the SPAC deal. As reported, in February 2024, Biote disclosed it agreed to buy back nearly $77 million of Dr. Donovitz’s stock to settle the matter.

In addition to breaches of fiduciary duties, the lawsuit by Ms. Donovitz also alleged that defendant Biote executives negligently “misled Plaintiff’s trustee regarding the likely impact of this Merger on the value of her shares, failed to disclose material information regarding the risks of this SPAC transaction (including the possibility that it would provide virtually no cash), and failed to disclose that these risks had materialized.”

Under the terms of the settlement with Ms. Donovitz, Biote will repurchase all of the approximately 8.3 million shares she owns. At an average of $7.23 per share, the payout will occur over a three-year schedule:  approximately 4.1 million shares valued at $30 million immediately, followed by 1.4 million shares valued at $10 million for each of the next three years.