Denver based DaVita, Inc., a provider of kidney dialysis services for patients suffering from chronic kidney failure or end stage renal disease (ESRD), recently agreed to a $135 million settlement with damaged shareholders. The agreement follows “more than three years of hotly contested litigation.”
The initial complaint – filed back on February 1, 2017 – included allegations that the company 1) made false and / or misleading statements; 2) failed to disclose senior executives purposefully steered patients into unnecessary insurance plans in order to maximize profits; 3) used American Kidney Fund as a vehicle in order to maximize profit; and 4) lacked effective internal controls over financial reporting. The complaint further states that all of these activities – when combined together – caused some of DaVita’s revenues and profits to be illegally obtained from 2015 through 2017.
Prior to investors having the opportunity to submit a claim, the next step in the case requires Judge William J. Martinez of the USDC Colorado to approve all terms of the settlement agreement. The Jacksonville Police & Fire Pension Fund and Peace Officers’ Annuity & Benefit Fund of Georgia led investors as lead plaintiffs. The law firm of Saxena White represented investors as lead counsel.
Interestingly, since the Private Securities Litigation Reform Act (PSLRA) passed Congress in 1995, this will be the third largest shareholder settlement in Colorado federal court. The two larger settlements were Qwest Communications International, Inc. in 2006 at $445 million and Clovis Oncology, Inc. in 2017 at $142 million.
ISS Securities Class Action Services will keep its clients up-to-date on further case developments, including the critical claim deadline date once announced by the court.
By Jeff Lubitz, Executive Director, ISS Securities Class Action Services