Clover Health Announces Agreement to Settle Securities Class Action Litigation
24 Abril 2023 - 10:00AM
Clover Health Investments, Corp. (NASDAQ: CLOV) (“Clover,” “Clover
Health” or the “Company”), a physician enablement company committed
to bringing access to great healthcare to everyone on Medicare,
today announced that the Company has reached an agreement to
resolve the securities class action captioned Bond v. Clover Health
Investments, Corp. et al., Case No. 3:21-CV-00096 (M.D. Tenn.) (the
“securities class action”), which was filed in the wake of its
de-SPAC transaction. The proposed settlement contains no admission
of liability or wrongdoing by any of the defendants, including the
Company, and is subject to definitive documentation and final court
approval.
On April 21, 2023, the parties to the securities class action
entered into a memorandum of understanding providing for the
settlement of the class action. Subject to negotiation of
definitive documentation and final court approval, the class will
receive $22 million dollars (less an award of fees and expenses to
the plaintiffs’ counsel, as determined by the court), the
defendants (including the Company) will receive customary releases,
and the litigation will be concluded. The Company will use
insurance proceeds totaling $19.5 million that have been advanced
or have been committed to be advanced by the Company’s insurers to
fund the settlement. The Company expects to pay $2.5 million of
out-of-pocket costs to fund the settlement.
The Company previously filed a lawsuit in Delaware state court
against certain of its insurers for full payment of its liabilities
related to this securities litigation. The Company intends to
continue to pursue that litigation against the insurance carrier
defendants to seek to recover additional funds, and intends to
oppose any efforts by the carrier defendants to recoup any
insurance proceeds that they have advanced or committed to advance
to date.
This settlement is subject to definitive documentation and final
court approval. The defendants have denied all wrongdoing and have
entered into this settlement to avoid the burden, expense, and
distraction of ongoing litigation. Further information on the
settlement will be available upon the filing of the formal notice
of settlement to class members, and the above descriptions of the
settlement is qualified entirely by the definitive settlement
papers and corresponding notice.
Andrew Toy, Clover Health’s Chief Executive Officer, stated:
“The Board and the Company are happy to have reached this
settlement. While the Company believes that the securities
class action was entirely without merit, we can now avoid
the continued, substantial legal defense costs and distractions
associated with the lawsuit. This resolution allows us to
focus on what is important; building a strong, sustainable business
which will benefit our members and shareholders alike.”
Clover notes that the settlement of the securities class action
does not resolve or release the claims asserted in several,
parallel derivative lawsuits filed in Delaware, New York, and
Tennessee courts.
Forward-Looking StatementsPlease note that this
press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements include statements regarding future
events and Clover Health’s future results of operations, financial
position, business strategy and future plans. Forward-looking
statements are not guarantees of future performance, and you are
cautioned not to place undue reliance on such statements. In some
cases, you can identify forward looking statements because they
contain words such as "may," "will," "should," "expects," "plans,"
"anticipates," "going to," "can," "could," "should," "would,"
"intends," "target," "projects," "contemplates," "believes,"
"estimates," "predicts," "potential," "outlook," "forecast,"
"guidance," "objective," "plan," "seek," "grow," "target," "if,"
"continue," or the negative of these words or other similar terms
or expressions that concern Clover Health's expectations, strategy,
priorities, plans or intentions. Forward-looking statements in this
release include, but are not limited to, statements regarding the
litigation and proposed settlement, including definitive
documentation, final court approval and the availability of
insurance proceeds, as well as expectations related to Clover
Health's liquidity, future performance, future operations and
future results. These statements are subject to known and unknown
risks, uncertainties and other factors that may cause our actual
results, levels of activity, performance or achievements to differ
materially from results expressed or implied in this press release.
Additional information concerning these and other risk factors is
contained in Clover Health’s latest Annual Report on Form 10-K
filed with the Securities and Exchange Commission (the “SEC”) on
March 1, 2023, including the Risk Factors section therein, and in
its other filings with the SEC. The forward-looking statements
included in this press release are made as of the date hereof.
Except as required by law, Clover Health undertakes no obligation
to update any of these forward-looking statements after the date of
this press release or to conform these statements to actual results
or revised expectations.
About Clover Health:Clover Health (Nasdaq:
CLOV) is a physician enablement company committed to bringing
access to great healthcare to everyone on Medicare. This includes a
health equity-based focus on seniors who have historically lacked
access to affordable, high-quality healthcare. Our strategy is
powered by our software platform, Clover Assistant, which is
designed to aggregate patient data from across the healthcare
ecosystem to support clinical decision-making and improve health
outcomes. We operate two distinct lines of business: Insurance and
Non-Insurance. Through our Insurance line of business, we provide
PPO and HMO Medicare Advantage plans in several states, with a
differentiated focus on our flagship wide-network, high-choice PPO
plans. Our Non-Insurance line of business similarly aims to reduce
cost-of-care while enhancing the quality of care for patients
enrolled in Original Medicare.
Press Contact:Andrew
Still-Baxterpress@cloverhealth.com
Investor Relations Contact:Ryan
Schmidtinvestors@cloverhealth.com
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