SAN DIEGO, CA—Olshan Frome Wolosky LLP announced that its clients Keith Valentine, John Bostjancic and Patrick Keran, the former Chief Executive Officer, Chief Financial Officer and Chief Legal Officer, respectively, of publicly traded Orthofix Medical Inc. (Nasdaq: OFIX), have won and/or obtained $24.5 million in damages in connection with Orthofix’s improper for cause terminations of their employment in September 2023.
Olshan achieved this result by prevailing entirely on Valentine’s breach of contract claim in his arbitration arising from his September 11, 2023, termination and obtaining subsequent favorable resolutions for Bostjancic and Keran, resulting in payment of the full value for their breach of contract claims, with interest and attorneys’ fees.
A trial team of Kyle Bisceglie, Peter Sartorius, and Daniel Lutfy represented Messrs. Valentine, Bostjancic, and Keran. Olshan worked with California co-counsel, William A. “Buz” White of Hill Farrer & Burrill. Orthofix was represented by Quinn Emanuel.
Olshan continues to represent Keran in his defamation claims pending in California state court, where Keran seeks to hold accountable for lost earnings and the harm he has suffered the individual Orthofix Board members who refused to consent to arbitration and played a responsible part in publishing defamatory statements regarding his termination.
Valentine, Bostjancic and Keran joined Orthofix on January 5, 2023, after Orthofix acquired SeaSpine, the public company they had successfully built and led since 2015. Although Orthofix was the larger company, post-acquisition leadership came from SeaSpine, including Valentine, Bostjancic and Keran.
After the acquisition and in response to “business concerns” surreptitiously raised by a legacy Orthofix executive, Kevin J. Kenny, to the legacy Orthofix Board member serving as Board chair, Catherine Burzik, Orthofix launched an internal investigation, which ultimately included the collection of thousands of text messages from the executives’ personal phones.
The case centered on 23 colorful, irreverent text exchanges sent exclusively and privately only among the three executives, including comments about Burzik. Although nearly all of the texts predated the executives’ employment at Orthofix and the effective date of their employment contracts, the Orthofix Board unanimously voted that the private text messages constituted “cause” for termination under the executives’ employment contracts as “material acts” of “moral turpitude” and terminated their employment for cause starting on September 11, 2023.
The case is significant in several respects. There was little legal or other precedent to invoke a so-called “moral turpitude clause” based on private communications bereft of outward workplace conduct that actually impacted others in any tangible way. The team argued it was an extraordinarily aggressive and punitive legal position for the Company to take in these circumstances.
