Corporate Governance Therapy for PainCare

PainCare Holdings, Inc. (Amex: PRZ) announced yesterday that it had reached an agreement in principle to settle a shareholder derivative lawsuit brought against certain of the company's officers and directors in connection with PainCare's restatement of financial results announced earlier this year.

The litigation is pending before Judge John Antoon, II in the United States District Court for the Middle District of Florida.

Federman & Sherwood are counsel for plaintiffs in the derivative litigation.

The settlement provides for the following relief:

• PainCare will expand its board with the appointment of a new board member to bring additional corporate governance expertise and public company experience.
• The company will adopt amended corporate by-laws mandating that directors will not serve on more than three corporate boards, including that of PainCare.
• External or internal legal counsel will be appointed and responsible for conducting an annual investigation of PainCare's corporate governance and board stewardship to ensure compliance with prevailing best industry practices, with the results of the investigation reported to the board.

The companion federal securities class action remains pending. In the federal securities class action, Barrack, Rodos & Bacine and Williams Schifino Mangione & Steady P.A. are lead and liaison counsel, respectively, for lead plaintiff, the Employees Retirement System of the Government of the Virgin Islands.

Of course, the company announced shortly after the first class actions were filed back in March:

the Company believes that these reported lawsuits lack merit and has engaged the international law firm of McDermott Will & Emery LLP to vigorously defend against such allegations and claims.

There you have it - a combination of the "vigorous defense" and the "scary defense counsel" press releases, and it happened just three days after this blog was launched.

PainCare describes itself as "one of the nation's leading providers of pain-focused medical and surgical solutions and services."

Daily Trivia: Barrack Rodos also represents the Retirement Systems Administration of the Commonwealth of Puerto Rico. While a number of plaintiff's firms have pension fund client lists on their websites, no word on which class action firms represent such other exotically located pension funds as the Northern Mariana Islands Retirement Fund, the Government of Guam Retirement Fund, the American Samoa Government Employees' Retirement Fund, the Puerto Rico University Retirement System, or any plans for the Federated States of Micronesia.