HCA paying $215 million to settle shareholder lawsuit over its initial public offering
The 2011 suit alleged HCA withheld financial results, as well as rates for cardiac surgeries deemed unnecessary, ahead of the IPO.
HCA Holdings on Wednesday said it will pay $215 million to settle a shareholder action suit over the information it disclosed prior to its 2011 initial public offering.
The 2011 suit alleged HCA withheld financial results, as well as rates for cardiac surgeries deemed unnecessary, ahead of the IPO.
HCA said the settlement resolves those allegations, but does not signify any admission of guilt.
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"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," Ed Fishbough, HCA spokesman, said in a statement.
Shareholders had claimed HCA had tried to hide that the U.S Department of Justice was investigating the major healthcare provider, as well as financial results tied to restructuring ahead of the IPO. Once the company went public and that info came out, HCA's share price fell more than 40 percent from its initial price.
The settlement is pending approvals by state and federal courts in Tennessee.
HCA said that it will likely record $120 million in costs tied to the settlement after it receives several insurance recoveries intended to offset the total settlement amount.
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