Plaintiffs v UnitedHealth Group Inc (UNH.N)
Judge OKs UnitedHealth $925.5 Million Backdating Pact
UnitedHealth Group Inc (UNH.N) and former chief executive William McGuire will pay $925 million to resolve an investor class-action lawsuit accusing the health insurer of improperly backdating stock options.
The Minnetonka, Minnesota-based company will pay $895 million toward the settlement fund, while McGuire will pay $30 million and former general counsel David Lubben will pay $500,000. McGuire will also relinquish options to buy 3.68 million UnitedHealth shares.
Judge James Rosenbaum of the U.S. District Court in Minneapolis approved the settlement in an order made public.
Given that there was "significant risk" to the plaintiffs recovering nothing had the case been fully tried, "the $925.5 million settlement amount is substantial," Rosenbaum wrote in his 26-page order. He had granted preliminary approval for the settlement last year.
The lead plaintiff in the more than 3-year-old case is the California Public Employees' Retirement System, or CalPERS, the nation's largest public pension fund.
UnitedHealth is one of more than 200 companies subjected to internal or regulatory probes of backdating since the practice first became widely understood earlier this decade.
Rosenbaum also awarded legal fees of about $64.8 million in the case - - considerably less than the more than $100 million asked for by counsel.
CalPERS was represented by Coughlin Stoia Geller Rudman & Robbins LLP.
The case is In re UnitedHealth Group Inc PSLRA Litigation, U.S. District Court, District of Minnesota (Minneapolis), No. 06-1691.
For more information please contact:
Coughlin Stoia Geller Rudman & Robbins LLP
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New York, NY 10007 Telephone: (212) 693-1058
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