Alliance Capital to Acquire Sanford Bernstein

June 20, 2000 (PLANSPONSOR.com) - Alliance Capital Management, the ninth-largest investment company in the world, has agreed to acquire Sanford Bernstein & Co., a money management and research firm, for close to $3.5 billion in cash and stock.

The takeover is the latest in a consolidation wave that is sweeping the money management industry, with foreign companies buying up American firms. Monday, Old Mutual agreed to take over United Asset Management Corp. Last week, France’s Caisse des Depots agreed to buy Nvest. Last month, UniCredito Italiano announced the takeover of Pioneer Group.

Today’s announcement also has a foreign angle. Alliance is controlled by AXA SA, the French financial group. Axa also owns Axa Financial/Equitable and Donaldson Lufkin & Jenrette.

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The new combined company will have roughly $475 billion in assets under management. It will manage assets for approximately 2,600 institutional and 15,000 private client accounts, as well as $189 billion in mutual fund assets.

Alliance will pay $1.5 billion in cash and 40.8 million newly issued limited partnerships units of Alliance Capital.

The transaction is expected to close in the fourth quarter.

editors@plansponsor.com

Pa. Court Shields ADA Recovery From Subrogation

May 8, 2001 (PLANSPONSOR.com) - A worker's damage recovery under the Americans With Disabilities Act (ADA) is not subject to subrogation by his employer or its insurance carrier, according to the Pennsylvania Commonwealth Court.

The court ruling in Brubacher Excavating Inc. v. Workers’ Compensation Appeal Board found that the alleged discrimination was not directly related to his original work injury, according to the Legal Intelligencer.

Case History

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James Bridges worked for Brubacher as a master mechanic, injuring his back on Sept. 17, 1992, while he was lifting a cylinder head from an engine. Bridges gave his employer Brubacher notice of the injury the following day.

From then until November 1993 Bridges received $455 per week in total disability benefits. He then began working for Diesel Services Inc. as a service writer/adviser, earning $400/week. Thereafter he continued to receive partial disability benefits of $245/week. However, Diesel’s workers’ compensation insurance carrier refused to cover Bridges, and he was terminated after just two weeks.

Bridges’ total disability benefits were reinstated on Nov. 22, 1993, and he has remained on total disability since that time, according to the report.

Court Case

In 1995, Bridges filed a suit against Diesel under the ADA, requesting $50,000 in compensatory and punitive damages. Brubacher and its workers’ comp insurance carrier asserted a right to subrogation against any recovery Bridges might get.

However, a workers’ compensation judge said they were not entitled to subrogation because the injury alleged in the civil action was unrelated to the work injury. The Workers’ Compensation Appeal Board affirmed that judgment and Brubacher appealed.

The Bridges court found that the state supreme court has addressed a similar issue in a 1980 decision, Dale Manufacturing Co. v. WCAB. In that situation, a worker sued a doctor who left a cotton pad inside her during surgery for her work-related injury. The employer tried to enforce its subrogation rights on the recovery she received, arguing that the doctor’s negligence aggravated the work injury. However, the court said the employer had not offered enough evidence.

Subrogation Clause

The court said in order for an employer to successfully assert its subrogation right must show:

  • it is compelled to make payments by reason of the negligence of a third party
  • the recovery was for the same compensable injury for which it was liable under the act

In Bridges, the court found that the plaintiff in Bridges sustained two separate injuries, the first to his back, and the second an act of employment discrimination from Diesel.

– Nevin Adams                            editors@plansponsor.com

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