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Case Status:    SETTLED
On or around 01/09/2007 (Date of order of final judgment)

Filing Date: March 12, 2003

According to a press release dated August 28, 2008, King Pharmaceuticals Inc. has agreed to pay $13.5 million in legal fees and make changes to its corporate governance to settle a shareholder derivative lawsuit that accused the company of breaching its fiduciary duty by underpaying commitments to Medicaid. The company revealed the settlement in a U.S. Securities and Exchange Commission filing on Wednesday.

On January 9, 2007, the Court entered the Order from the Final Settlement Conference proceedings held before Judge Thomas W. Phillips and Judge Dennis H. Inman. The Court entered the Order granting the Motion for Settlement and Plan of Allocation. The Court also entered the Order granting the Motion for Attorney Fees and Reimbursement of Litigation Expenses. Lastly, the Court entered the Final Judgment and Order of Dismissal with Prejudice.

According to a press release dated August 7, 2006, King Pharma has paid $38.25 million in class-action lawsuit settlement. The lawsuit alleged King broke federal securities laws. The firm said the amount, which is pending approval by the court, is likely to be paid by its insurance carriers.

As previously disclosed by the Company’s Form 10-Q for the quarterly period ended March 31, 2006, in November 2005, the parties agreed to submit the matter to non-binding mediation. After an extensive mediation process, an agreement in principle to settle the litigation was reached on April 26, 2006. The parties have not yet completed the negotiation and execution of a definitive settlement agreement, and no assurance can be given that such an agreement will be reached. Further, any such agreement will be subject to approval by the court.

Beginning in March 2003, 22 purported class action complaints were filed by holders of the Company’s securities against the Company, its directors, former directors, executive officers, former executive officers, a Company subsidiary, and a former director of the subsidiary in the United States District Court for the Eastern District of Tennessee, alleging violations of the Securities Act of 1933 and/or the Securities Exchange Act of 1934, in connection with the Company’s underpayment of rebates owed to Medicaid and other governmental pricing programs, and certain transactions between the Company and the Benevolent Fund. These 22 complaints have been consolidated in the United States District Court for the Eastern District of Tennessee. In addition, holders of the Company’s securities filed two class action complaints alleging violations of the Securities Act of 1933 in Tennessee state court. The Company removed these two cases to the United States District Court for the Eastern District of Tennessee, where these two cases were consolidated with the other class actions. The district court has appointed lead plaintiffs in the consolidated action, and those lead plaintiffs filed a consolidated amended complaint on October 21, 2003 alleging that King, through some of its executive officers, former executive officers, directors, and former directors, made false or misleading statements concerning its business, financial condition, and results of operations during periods beginning February 16, 1999 and continuing until March 10, 2003. Plaintiffs in the consolidated action have also named the underwriters of King’s November 2001 public offering as defendants. The Company and other defendants filed motions to dismiss the consolidated amended complaint. On August 12, 2004, the United States District Court for the Eastern District of Tennessee ruled on defendants’ motions to dismiss. The Court dismissed all claims as to Jones and as to defendants Dennis Jones and Henry Richards. The Court also dismissed certain claims as to five other individual defendants. The Court denied the motions to dismiss in all other respects. Following the Court’s ruling, on September 20, 2004, the Company and the other remaining defendants filed answers to plaintiffs’ consolidated amended complaint. Discovery in this action has commenced. The Court has set a trial date of April 10, 2007.

The original Complaint charges King Pharmaceuticals and certain of its officers
with violations of federal securities laws. Among other things,
plaintiff claims that defendants' material omissions and the
dissemination of materially false and misleading statements concerning
King Pharmaceuticals' business operations and earnings caused King
Pharmaceuticals' stock price to become artificially inflated, inflicting
damages on investors. King Pharmaceuticals manufactures, markets and
sells primarily branded prescription pharmaceutical products to general
and family practitioners and internal medicine physicians and hospitals
across the United States. The Complaint alleges that during the Class
Period Defendants misrepresented that the prices paid by governmental
Medicaid agencies were the "best price" - i.e., the cheapest price
offered to distributors and other purchasers - for a particular drug,
resulting in government overpayment for drugs purchased through the
Medicaid program. The complaint further alleges that the Company
recognized revenue subject to "pharmaceutical rebate" payments provided
by King Pharmaceuticals to distributors to stock up on the Company's
blood-pressure drug, Altace(R). On March 11, 2003, defendants disclosed
that the Securities and Exchange Commission is investigating King
Pharmaceuticals and has subpoenaed, among other things, the Company's
"best price" lists and all documents related to the pricing of the
Company's pharmaceutical products to any governmental Medicaid agency
during 1999 and the accrual and payment of rebates on Altace. News of
the SEC investigation caused a 23% drop in the price of King
Pharmaceuticals' stock on the day the investigation was disclosed.

COMPANY INFORMATION:

Sector: Healthcare
Industry: Biotechnology & Drugs
Headquarters: United States

SECURITIES INFORMATION:

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

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

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: E.D. Tennessee
DOCKET #: 03-CV-77
JUDGE: Hon. Thomas G. Hull
DATE FILED: 03/12/2003
CLASS PERIOD START: 04/26/1999
CLASS PERIOD END: 03/11/2003
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Abbey Gardy, LLP (New York)
    212 East 39th Street, Abbey Gardy, LLP (New York), NY 10016
    212.889.3700 · info@abbeygardy.com
  2. Brian Felgoise
    230 South Broad Street, Suite 404 , Brian Felgoise, PA 19102
    215.735.6810 215/735.5185. ·
  3. Cauley Geller Bowman Coates & Rudman, LLP (New York)
    200 Broadhollow, Suite 406, Cauley Geller Bowman Coates & Rudman, LLP (New York), NY 11747
    631.367.7100 631.367.1173 ·
  4. Chitwood & Harley LLP
    1230 Peachtree Street, N.E., 2300 Promenade II, Chitwood & Harley LLP, GA 30309
    888.873.3999 404.873.4476 · info@chitwoodlaw.com
  5. Glancy Binkow & GoldBerg LLP
    1925 Century Park East, Suite 2100, Glancy Binkow & GoldBerg LLP, CA 90067
    310-201-9150 · info@glancylaw.com
  6. Kirby McInerney & Squire LLP
    830 Third Avenue 10th Floor, Kirby McInerney & Squire LLP, NY 10022
    212.317.2300 ·
  7. Law Offices of Charles J. Piven, P.A.
    World Trade Center-Baltimore,401 East Pratt Suite 2525, Law Offices of Charles J. Piven, P.A., MD 21202
    410.332.0030 · pivenlaw@erols.com
  8. 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
  9. Spector Roseman & Kodroff (San Diego)
    1818 Market Street, Suite 2500, Spector Roseman & Kodroff (San Diego), PA 19103
    215.496.0300 215.496.6611 ·
  10. Wolf Haldenstein Adler Freeman & Herz LLP (New York)
    270 Madison Avenue, Wolf Haldenstein Adler Freeman & Herz LLP (New York), NY 10016
    212.545.4600 212.686.0114 · newyork@whafh.com
No Document Title Filing Date
COURT: E.D. Tennessee
DOCKET #: 03-CV-77
JUDGE: Hon. Thomas G. Hull
DATE FILED: 10/24/2003
CLASS PERIOD START: 02/16/1999
CLASS PERIOD END: 03/10/2003
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Abbey Gardy, LLP (New York)
    212 East 39th Street, Abbey Gardy, LLP (New York), NY 10016
    212.889.3700 · info@abbeygardy.com
  2. Abbey Spanier Rodd Abrams & Paradis, LLP (New York)
    212 East 39th Street, Abbey Spanier Rodd Abrams & Paradis, LLP (New York), NY 10016
    212-889-3700 212-684-519 · info@abbeyspanier.com
  3. Bernstein Litowitz Berger & Grossmann LLP (former San Diego)
    12544 High Bluff Drive, Suite 150, Bernstein Litowitz Berger & Grossmann LLP (former San Diego), CA 92130
    858.793.0070 858.793.0323 · blbg@blbglaw.com
  4. Chernau, Chaffin & Burnsed, P.C.
    424 Church Street, Suite 1750, SunTrust Center, Chernau, Chaffin & Burnsed, P.C., TN 37219
    615.244.5480 ·
  5. Schatz & Nobel, P.C.
    330 Main Street, Schatz & Nobel, P.C., CT 06106
    800.797.5499 860.493.6290 · sn06106@AOL.com
  6. Weiss & Lurie (New York, NY)
    The French Building, 551 Fifth Ave., Suite 1600, Weiss & Lurie (New York, NY), NY 10126
    212.682.3025 212.682.3010 · info@wyca.com
  7. 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
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No Document Title Filing Date