Judge Approves $925M UnitedHealth Backdating Suit
Settlement
August 12, 2009 (PLANSPONSOR.com) - UnitedHealth
Group Inc. and its 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, Reuters reports.
Under the agreement, the company will pay $895 million,
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,
the news report said.
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," U.S. District Court Judge James Rosenbaum
wrote in his 26-page order dated August 10, according to
Reuters. He had granted preliminary approval for the
settlement in December (see
Court Gives Preliminary OK to UnitedHealth
$900M Options Settlement
).
Judge Rosenbaum also awarded legal fees of about $64.8
million. The lead plaintiff in the case is the California
Public Employees' Retirement System (CalPERS), the nation's
largest public pension fund.
According to the news report, a UnitedHealth
spokesman said the company welcomed approval of the
agreement "and the closure it brings to these matters."
McGuire said in a statement that he is pleased with the
settlement's approval, and he now plans to focus on
business and philanthropic interests.
Rebecca Moore
editors@plansponsor.com