Errata: “Alphatec’s $49 Million French Adventure”

On April 8, 2013 in an article titled, “Alphatec’s $49 Million French Adventure, ” we reported, “A jury found Alphatec Holdings, Inc., and its owners, HealthpointCapital, LLC, guilty of transferring assets for less than fair market value and millions would have to be paid to OrthoTec, LLC, the injured party.”

We erred. None of those parties were found guilty.

Ebun S. Garner, Esq., General Counsel and SVP Alphatec Spine, Inc., wrote to tell us that the trial was between OrthoTec and Surgiview SAS, a subsidiary of Scient’X SAS. “None of Alphatec, Healthpoint, John Foster or Tim Berkowitz were defendants in this trial. Thus, the jury did not make any findings with respect to Alphatec, Healthpoint or Messrs. Foster or Berkowitz.”

He also objected to the use of the word “guilty” in the article in that the term is used in criminal proceedings, not civil proceedings.

He points out that Surgiview has limited assets all located in France. “It is unlikely that a judgment against it could ever be collected upon.” Mr. Garner also points out that following the trial, there was to be a second trial “in which it would be determined whether Alphatec could be held responsible for the judgment against Surgiview under a theory of piercing the corporate veil. Thus, nobody was sprinting to the appeals court. A judgment had not even been entered against Surgiview yet, let alone the beginning of the Alphatec trial.”

Mr. Garner tells us that the plaintiff contacted Alphatec to settle following the verdict, “because of the uncertainty in the OrthoTec, Surgiview, Scient’X, Alphatec and Healthpoint made a collective decision to settle the case.”

While Alphatec agreed to pay the plaintiff $49 million, Mr. Garner says that Messrs. Forster and Berkowitz have not agreed to pay anything to OrthoTec in the settlement. He said they are two of nine directors of Alphatec. “They are not managing partners of Alphatec.”

Mr. Garner also pointed out mistakes about the timing and nature of the relationships between the companies involved in the story. For instance, Eurosurgical sold its interests in Surgiview to a Swiss company called Indev in 2004 and Indev sold its interests to Scient’X in 2005. Alphatec acquired Scient’X in 2010, not 2006, as we erroneously reported. Therefore, OrthoTec did not sue Alphatec until 2011.

In previous court documents, it was alleged that Olivier Carli, one of the founders of Scient’X, was the sole director of Surgiview. “Surgiview is an SCS, which under French law means that it does not have a board of directors. You mention that Olivier Carli is the sole director. That is not possible, ” wrote Mr. Garner.

Finally in response to our report that OrthoTec’s attorneys stated that the case will now move to New York, Mr. Garner says “the settlement included the matter in New York against Healthpoint and Messrs. Forster and Berkowitz.”

We appreciate Mr. Garner’s corrections and clarifications and apologize for our errors.