AAC stock plunges after key staff indicted for Murder
It is always something of a surprise, even to those of us used to the sometimes unusual things that unfold on the stock market, when a very hot stock undergoes a very sudden change in fortune. This is exactly what has happened in the last couple of weeks to one of this year’s New York Stock Exchange most successful stocks – AAC Holdings.
After its initial public offering in October, AAC had an incredible run of market confidence, their stock soaring by 150%. However, all that good faith was seemingly destroyed in an instant when the company and its president, along with some other staff members, received a murder indictment in late July.
August 4th was a very dark day for the stock, with share prices dropping by up to 53% and trading actually stopped for a brief while due to the volatility of this stock. It is clear then, that the aftermath of a serious scandal like this can be devastating to a previously thriving enterprise – but what is the story behind these murder indictments?
American Addiction Centers and A Better Tomorrow
To understand the events that led to the indictment of (newly resigned) AAC Holdings president, co-founder and major shareholder Jerrod Nathan Menz, along with Mignon Dean, who is still with the company, and two other employees who had left in the time between the incident and the indictment, it is first important to know a bit about AAC Holdings.
AAC was the new name for a company previously known as Forterus Inc. It had been listed on the New York Stock Exchange in October 2014, and, as previously mentioned, was doing rather well prior to the indictments. AAC’s main operating unit is American Addiction Centers, which runs a string of seven drug and alcohol rehab centers around the USA, including one called A Better Tomorrow treatment center in Murrieta, California.
It was at A Better Tomorrow drug and alcohol treatment center, now run by American Addiction Centers under AAC Holdings, previously under the name of Forterus Inc. that a patient called Gary Benefield died back in July 2010, starting the chain of events that lead to this summer’s biggest stock drama.
Why Are AAC Held Responsible for the Death of Gary Benefield?
Gary Benefield was a 52 year old man from Springerville, Arizona, who, for reasons that have not been disclosed in discussion of this case, wanted treatment at A Better Tomorrow rehab center. He was not in good health when he flew out to LA to head to the clinic in Murietta; he had chronic obstructive pulmonary disease, emphysema, and had recently received treatment in hospital for pneumonia.
Gary Benefield was using an oxygen tank right up until it was emptied at the airport. However, when he arrived at A Better Tomorrow, staff did not administer oxygen to him. Instead, they gave him antidepressants.
Gary Benefield was then left unchecked in his room from midnight until the following morning, reportedly because the staff who should have monitored his condition routinely were asleep.
The next day, Gary Benefield died. It was his 53rd birthday.
The Indictment of AAC and Jerrod Nathan Menz
The case of Gary Benefield, along with several other deaths at A Better Tomorrow, was looked into by the California Senate Office of Oversight and Outcomes in 2012. Since then, a case has been brought against AAC and its president Jerrod Nathan Menz, plus Mignon Dean and two staff who were working at A Better Tomorrow when Gary Benefield died, as having unlawfully caused his death. Another member of AAC Holdings staff was indicted for abuse of a dependent adult, additionally.
At present AAC Holdings deny liability for Gary Benefield’s death, and the official line is that they will use their resources to defend the company and those who have been indicted. Jerrod Nathan Menz has officially resigned from the company board, but it is said that he will still be working closely with AAC.
Menz has posted bond and is expected to be in court in October – a year after AAC listed on the stock exchange. It just goes to show that in the story of one stock, a year can be a very long time…