- HCA Holdings has agreed to settle a pending shareholder lawsuit, Schuh v HCA Holdings, regarding the company’s 2011 initial public offering, StreetInsider.com reported.
- The lawsuit alleges the company used misleading and false information in 2011 when its initial public offering was made to sell stock, Modern Healthcare reported.
- The terms of the settlement in the Schuh case include a payment by HCA of $215 million in return for a full release of all claims against all defendants, including HCA Holdings, reported StreetInsider.com.
In addition, the company reached preliminary agreements to settle two shareholder derivatives, Sutton v Bracken and Schroeder v Bracken, both of which are also related to the company’s initial public offering.
“The agreements in principal disclosed today to settle class action and derivative lawsuits, if approved by the courts, will conclude the litigation arising from the company's 2011 IPO,” HCA said in a prepared statement as quoted in Modern Healthcare. “While we believe the allegations were without merit, we also believe that eliminating the risk, cost and distraction of the litigation is in the best interest of our shareholders."
The Schuh lawsuit alleged HCA sold around $4.3 billion of the company’s common stock at $30 per share using deceptive information provided to the Securities and Exchange Commission, according to Modern Healthcare. By October 2011, the common stock fell to $18.81 a share, Modern Healthcare noted.
HCA estimated it will record legal claim costs of nearly $120 million for the settlements, StreetInsider.com reported.