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Case Status:    SETTLED
On or around 12/13/2004 (Date of order of final judgment)

Filing Date: March 12, 1999

The original Complaint charges that Sun Healthcare and certain of its officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing materially false and misleading statements concerning the impact that changes in the Medicare reimbursement system brought about by the prospective payment system ("PPS") would have on the Company's business prospects and operating results. Specifically, the Complaint alleges that defendants failed to disclose (a) that profit margins and reimbursement rates for ancillary services would be substantially lower under PPS; (b) that the goodwill of Sun Healthcare's domestic facilities had become impaired as a result of the PPS; and (c) that the financial results of the Company would be materially and adversely impacted because certain operations acquired from Retirement Care Associates by Sun Healthcare had been unprepared for the conversion to PPS during the Class Period.

By Order dated July 12, 1999, the Court appointed Joel Shpigel, Marc Blatstein and William Gabriel as Lead Plaintiffs, and approved Lead Plaintiffs’ selection of counsel.
The Consolidated Amended Complaint for Violation of the Securities Exchange Act of 1934 was filed September 10, 1999 (the “Consolidated Complaint”). The Consolidated Complaint alleges violations of §§10(b) and 20 of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder on behalf of a class of persons who purchased or otherwise acquired the common stock of Sun Healthcare Group, Inc. during the period between June 2, 1998 and February 1, 1999. The Consolidated Complaint asserted claims against Sun, Andrew L. Turner, Marc G. Wimer, and Robert D. Woltil. In October 1999, Sun filed for bankruptcy. In December 2000, the parties stipulated and the Court ordered the dismissal of all claims against Sun without prejudice. Plaintiffs’ claims against Sun were extinguished in its bankruptcy proceeding. As a result, the individual defendants filed their motion to dismiss the Consolidated Complaint on December 5, 2000. The Court heard oral argument on the individual defendants’ motion on September 25, 2001 and issued its Order granting the motion to dismiss with prejudice on January 15, 2002. On January 31, 2002, the Court entered a judgment dismissing the Litigation. Thereafter, on February 14, 2002, plaintiffs filed a motion to amend the judgment dismissing this action with prejudice. On April 21, 2003, the Court denied plaintiffs’ motion to amend. On May 20, 2003, plaintiffs filed a Notice of Appeal. That appeal was fully briefed and pending at the time a settlement was reached. On June 3, 2004, the Tenth Circuit Court of Appeals conditionally remanded the case back to this Court for approval of the settlement.

On September 22, 2004, a Stipulation of Settlement was filed establishing a settlement fund in the amount of $5,000,000 in cash. The settlement was preliminarily approved on September 29, 2004. On December 13, 2004, Chief Judge Martha Vazquez granted the motion for final approval of settlement and plan of allocation of settlement proceeds. Judge Vazquez granted the motion for award of attorney fees & reimbursement of expenses. The Final Judgment and Order was entered that same day, dismissing the case with prejudice.

COMPANY INFORMATION:

Sector: Healthcare
Industry: Healthcare Facilities
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: SHG
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data


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In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: D. New Mexico
DOCKET #: 99-CV-00269
JUDGE: Magistrate Judge Leslie C. Smith
DATE FILED: 03/12/1999
CLASS PERIOD START: 06/02/1998
CLASS PERIOD END: 02/01/1999
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Browning & Peifer, P.A.

    505.247.4800 ·
  2. John Newman Carr, Attorney
    3019 Arno, N.E., John Newman Carr, Attorney, NM 87107
    505.344.1675 ·
  3. Stull, Stull & Brody (New York)
    6 East 45th Street, Stull, Stull & Brody (New York), NY 10017
    310.209.2468 310.209.2087 · SSBNY@aol.com
  4. Weiss & Yourman (New York, NY)
    The French Building, 551 Fifth Ave., Suite 1600, Weiss & Yourman (New York, NY), NY 10126
    212.682.3025 212.682.3010 · info@wyca.com
No Document Title Filing Date
COURT: D. New Mexico
DOCKET #: 99-CV-00269
JUDGE: Magistrate Judge Leslie C. Smith
DATE FILED: 09/10/1999
CLASS PERIOD START: 06/02/1998
CLASS PERIOD END: 02/01/1999
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA)
    600 West Broadway, 1800 One America Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA), CA 92101
    800.449.4900 · support@milberg.com
  2. Schiffrin & Barroway LLP
    3 Bala Plaza E, Schiffrin & Barroway LLP, PA 19004
    610.667.7706 610.667.7056 · info@sbclasslaw.com
  3. Weiss & Yourman (New York, NY)
    The French Building, 551 Fifth Ave., Suite 1600, Weiss & Yourman (New York, NY), NY 10126
    212.682.3025 212.682.3010 · info@wyca.com
No Document Title Filing Date
No Document Title Filing Date