ST. LOUIS — A state appeals court has largely upheld a trial court judgment in favor of Pharmacy Corporation of America (PharMerica) in a long-running dispute stemming from its 2016 purchase of Premier Rx, finding that the seller breached the parties’ asset purchase agreement through false representations about key customer contracts.
However, the Missouri Court of Appeals for the Eastern District reversed part of the judgment involving one defendant, concluding there was insufficient evidence to hold him personally liable under a corporate veil-piercing theory.
In an opinion filed June 30, the court affirmed the trial court’s findings against Binyamin M. Klein, also known as Benjamin Klein, both individually and as trustee of his revocable trust, while reversing and remanding the portion of the judgment imposing joint and several liability on Paresh Vipani for veil-piercing and alter ego claims.
The case was also remanded for the trial court to determine an award of attorney fees incurred during the appeal and for further proceedings regarding the extent of Vipani’s liability under the asset purchase agreement.
According to the opinion, Klein formed Sunspire Pharmacy LLC in 2015 to acquire JPKB Associates LLC, doing business as Premier Rx.
Premier Rx provided pharmacy services to numerous long-term care facilities throughout Missouri, many of which Klein also owned.
Vipani served as chief financial officer of Platinum Health Care LLC, a management company controlled by Klein that handled accounting and financial services for those facilities.
Vipani also held a four percent ownership interest in Premier Rx as part of his compensation.
PharMerica began negotiations to purchase Premier Rx in early 2016 and completed the $9.35 million acquisition in June of that year after conducting financial and legal due diligence.
The asset purchase agreement identified 27 pharmacy service agreements with long-term care facilities as material contracts, including agreements involving Gregory Ridge and Parkway Health and Rehab.
Klein represented in the agreement that, to his knowledge, there were no threats or notices of termination affecting those contracts.
The transaction closed in July 2016. According to the court, PharMerica later learned that Gregory Ridge and Parkway had been sold to Reliant Care Management months earlier, during PharMerica’s due diligence process.
Reliant informed PharMerica that it intended to terminate the pharmacy service agreements because it planned to use its own pharmacy provider.
The appellate court said the evidence supported the trial court’s finding that Klein knew of Reliant’s plans before the sale closed but failed to disclose that information, despite representing otherwise in the purchase agreement.
PharMerica sent Klein a formal claim notice in August 2017 alleging breaches of the purchase agreement and later filed suit in 2018 after receiving no substantive response. Following a bench trial in 2024, the trial court entered judgment in PharMerica’s favor in 2025.
On appeal, Klein challenged the findings on multiple grounds, including whether the evidence supported a breach of contract, whether PharMerica provided adequate notice under the agreement, whether contractual damages should have been capped, whether the corporate veil could be pierced, and whether attorney fees were properly awarded. The appellate court rejected each of those arguments.
The court concluded there was substantial evidence that Klein breached the agreement by falsely representing that he did not know about any threatened termination of the pharmacy service agreements tied to Gregory Ridge and Parkway.
The judges noted the trial court found testimony from Reliant’s general counsel and PharMerica’s executive to be credible while finding Klein’s testimony lacked credibility. Appellate judges deferred to those credibility determinations, stating they supported the breach of contract ruling.
The appellate court also upheld the trial court’s determination that Klein’s conduct met the agreement’s definition of “Actual Fraud,” allowing PharMerica to recover damages beyond the contract’s $2 million liability cap.
The opinion stated Klein had a contractual duty to disclose his knowledge that the pharmacy service agreements would be terminated and that PharMerica relied on his representations when valuing and structuring the transaction.
In addition, the court ruled PharMerica’s claim notice satisfied the agreement’s notice requirements by describing the factual basis of its claims, identifying the relevant contractual provisions, and asserting actual fraud.
The court further found Klein failed to demonstrate any prejudice from the alleged deficiencies in the notice.
It also affirmed the award of attorney fees, concluding that the purchase agreement expressly required indemnification for losses, including reasonable attorney fees, resulting from a breach.
The appellate court likewise upheld the decision to pierce the corporate veil as to Klein, finding substantial evidence that he exercised complete control over the nursing home entities, the pharmacy business and the management company that handled their finances.
The opinion cited evidence that Klein controlled payments, approved vendor disbursements, and directed management fees to his company before other creditors were paid.
The outcome differed for Vipani. Although the court acknowledged he oversaw accounting and financial operations as chief financial officer of Platinum, it found the evidence established that Klein remained the ultimate decision-maker.
The opinion concluded there was insufficient evidence that Vipani exercised complete dominion over business policy and practices required to impose personal liability through veil-piercing or an alter ego theory.
As a result, the court reversed that portion of the judgment and remanded the case for further proceedings concerning the scope of Vipani’s liability under the purchase agreement.
Missouri Court of Appeals, Eastern District case number: ED113688
