NPE Shareholders Accused of Avoiding Fees Through Shell Company in Octane Companion Case

April 20, 2017

Three shareholders of Texas-based NPE Allcare Health Management System, Inc. have moved to dismiss a lawsuit filed by Highmark, which seeks to pierce the corporate veil and hold them personally liable for a $5.2M attorney fee award. In a complaint filed in January, Highmark asserts that Allcare principals W. Halden Conner, Thomas G. Plaskett, and Robert H. Shelton purposefully operated the NPE as a “nearly insolvent shell entity” in a fraudulent attempt to avoid paying fees, while the three shareholders now deny any breach of fiduciary duty and allege pleading deficiencies. The underlying fee dispute in Highmark v. Allcare (4:03-cv-01384) made it to the US Supreme Court, leading to an April 2014 holding that attorney fee awards can be reviewed only for abuse of discretion (2012-1163). That same day, the Court held in companion case Octane Fitness v. Icon Health & Fitness that a patent suit may be found to be “exceptional” under Section 285 by considering the “totality of the circumstances” (2012-1184).

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