Sierra settles class action over UnitedHealthPosted On: Jun. 11, 2007 12:00 AM CST
LAS VEGAS--Sierra Health Services Inc. has settled a shareholder lawsuit seeking class action status relating to its proposed acquisition by UnitedHealth Group Inc.
The complaint against the Las Vegas-based health insurer and its directors alleged breaches of fiduciary duties of "loyalty, due care, independence, good faith and fair dealing" in connection with the planned $2.6 billion acquisition by Minnetonka-Minn.-based UnitedHealth, according to a filing on Friday with the U.S. Securities and Exchange Commission. The lawsuit was filed March 19 in the Eighth Judicial District Court for the State of Nevada in Clark County.
In the settlement, Sierra denied any wrongdoing but agreed to resolve all the claims, including those relating to the proposed transaction, fiduciary obligations in connection with the acquisition, and negotiations and disclosures made in connection with the acquisition.
The settlement will be subject to certain conditions, including court approval following notice to members of the proposed settlement class and consummation of the transaction. Sierra will also pay plaintiffs' counsel attorneys' fees and expenses of $485,000.
The settlement will not affect any provision of the proposed transaction, which could be completed prior to final court approval of the settlement, according to the SEC filing. The transaction is expected to close by the end of this year, the filing stated.
The acquisition has received vocal opposition from consumer and provider groups, including the Chicago-based American Medical Assn., which asked the U.S. Department of Justice to block the transaction. The insurers recently received a request for additional information from the antitrust division of the DOJ.
A spokesman for Sierra could not be immediately reached for comment.