When an entity such as a trust or pension fund chooses to litigate alleged fraud, we know that it can be just as important to affect changes to prevent similar actions in the future as it is to recover lost investment funds.
Manville Personal Injury Settlement Trust v. Gemunder
On Oct. 28, 2013, the court granted final approval of a $16.7 million settlement to fund corporate governance measures within Omnicare, Inc., the nation’s largest nursing home pharmacy, following allegations that the company participated in illegal kickback schemes.
The U.S. Department of Justice issued an announcement in Nov. 2009 stating that Omnicare had agreed to pay $98 million to settle state and federal investigations into allegedly illegal kickback schemes. These alleged actions prompted shareholders to pursue litigation to recoup losses in stock value and to enhance corporate governance.
In April 2010, Motley Rice filed a shareholder derivative suit on behalf of our client, The Manville Personal Injury Settlement Trust, against former Omnicare president and CEO Joel Gemunder, along with other company executives and board members, for allegedly participating in illegal kickback schemes with a number of entities including its clients, a pharmaceutical provider and a pharmaceutical manufacturer.
Following significant discovery, which included analyzing 1.4 million pages of documents, the parties agreed on the $16.7 million settlement. After deducting court-awarded fees and costs, the settlement will fund corporate governance measures including an Omnicare Compliance Committee. The settlement also called for Omnicare to adopt and/or maintain corporate governance measures relating to, among other things, employee training and ensuring the appropriate flow of information to the compliance committee.
The case is Manville Personal Injury Settlement Trust v. Gemunder, No. 10-CI-01212 (Ky. Cir. Ct.) (regarding Omnicare, Inc.).
If you have questions regarding cases similar to the Manville Personal Injury Settlement Trust v. Gemunder settlement or if you would like to discuss a potential case, contact our securities team by email or call 1.800.768.4026.
*Prior results do not guarantee a similar outcome.