GOLDEN, Colo.- LAWFUEL – The Law Jobs & Newswire –Health Grades, Inc. (Nasdaq: HGRD) today announced that an arbitration panel from the American Arbitration Association ruled in HealthGrades’ favor in its arbitration with Hewitt Associates LLC (Hewitt). The arbitration related to a Development and Services Agreement (the “Agreement”) HealthGrades and Hewitt entered into on June 30, 2005. HealthGrades filed a Demand for Arbitration against Hewitt on March 28, 2006 that claimed, among other things, that Hewitt breached the terms of the Agreement.
The arbitration panel ruled that the Agreement was a valid and enforceable contract and that Hewitt was in breach of the Agreement. The panel awarded HealthGrades $3.6 million, plus an additional amount of $467 per day until the award is paid or reduced to judgment. The panel’s award was based upon the three-year minimum annual guarantee under the Agreement. This guarantee was $3 million annually for 2007, 2008 and 2009. The panel reduced this amount by its estimate of expected costs of generating revenues. After deriving a net revenue amount, the panel then performed a present value calculation of the net revenue amount utilizing a discount rate of 15%. The panel added prejudgment interest of approximately $192,000.
In addition, the panel concluded that HealthGrades was the “prevailing party” pursuant to section 21(c) of the Hewitt Agreement. As such, the panel ruled that HealthGrades is entitled to an award of reasonable attorneys’ fees and costs.
About HealthGrades
Health Grades, Inc. (Nasdaq: HGRD) is the leading healthcare ratings organization, providing ratings and profiles of hospitals, nursing homes and physicians. Millions of consumers and many of the nation’s largest employers, health plans and hospitals rely on HealthGrades’ independent ratings and decision-support resources to make healthcare decisions based on the quality of care. More information on the company can be found at http://www.healthgrades.com.
