Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
In connection with John (Jack) Larsen's appointment as Executive Chair of ATI
Physical Therapy, Inc. (formerly Fortress Value Acquisition Corp. II, "ATI" or
the "Company"), as previously disclosed in the Company's Form 8-K filed on
August 9, 2021, the Company has determined to compensate Mr. Larsen by paying
him additional cash compensation of $720,000, paid over six (6) months in
accordance with the Company's payroll practices, and Mr. Larsen will receive
equity valued at $480,000 at the time of grant, in the form of 50% stock options
and 50% restricted stock units. This compensation will be in addition to
compensation he receives for his service on the Board of Directors.
Item 8.01. Other Events
On August 16, 2021, two purported ATI shareholders, Kevin Burbige and Ziyang
Nie, filed a putative class action complaint in the U.S. District Court for the
Northern District of Illinois against ATI, Labeed Diab, Joe Jordan, and Drew
McKnight (collectively, the "ATI Individual Defendants," as defined in the
complaint), and Joshua Pack, Marc Furstein, Leslee Cowen, Aaron Hood, Carmen
Policy, Rakefet Russak-Aminoach, and Sunil Gulati (collectively, the "FVAC
Defendants," as defined in the complaint). The complaint asserts claims against:
(i) the ATI Individual Defendants under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 (the "Exchange Act"); and (ii) the ATI
Individual Defendants and the FVAC Defendants under Section 14(a) of the
Exchange Act. Plaintiffs purport to assert their claims on behalf of those ATI
shareholders who purchased or otherwise acquired their ATI shares between
April 1, 2021 and July 23, 2021, inclusive, and/or held FVAC Class A common
shares as of May 24, 2021 and were eligible to vote at FVAC's June 15, 2021
special meeting.
Specifically, plaintiffs allege that the proxy materials for the FVAC/ATI
merger, as well as other ATI disclosures (including the press release announcing
ATI's financial results for the first quarter of 2021), were false and
misleading (and, thus, in violation of Sections 10(b) and 14(a) of the Exchange
Act) because they failed to disclose that: (i) ATI was experiencing attrition
among its physical therapists; (ii) ATI faced increasing competition for
clinicians in the labor market; (iii) as a result, ATI faced difficulty
retaining therapists and incurred increased labor costs; (iv) also as a result,
ATI would open fewer new clinics; and (v) also as a result, the defendants'
positive statements about ATI's business, operations, and prospects were
materially misleading and/or lacked a reasonable basis. Plaintiffs seek money
damages in an unspecified amount. Plaintiffs have not yet served the complaint
on any of the defendants.
Cautionary Note Regarding Forward-Looking Statements
Certain statements included in this Form 8-K are forward-looking statements for
purposes of the safe harbor provisions under the United States Private
Securities Litigation Reform Act of 1995. These are not statements of historical
facts and are based on management's beliefs and assumptions and on information
currently available. They are subject to risks and uncertainties that could
cause the actual results and the implementation of the Company's plans to vary
materially, including the risks inherent in litigation. Certain of these risks
are discussed in the Company's filings with the U.S. Securities and Exchange
Commission ("SEC"), including, without limitation, the Company's amended S-1
registration statement filed with the SEC on July 28, 2021, its Quarterly Report
on Form 10-Q filed with the SEC on August 16, 2021, and our other filings with
the SEC. Except as required by law, the Company assumes no obligation to update
these forward-looking statements publicly, even if new information becomes
available in the future.
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