On September 9, 2016, the initial complaint in this securities class action was filed against Quorum Health Corporation (“Quorum”), and certain of Quorum’s directors and officers, asserting violations of sections 10(b) and 20(a) of the Securities Exchange Act. On April 17, 2017, Plaintiff filed the Second Amended Class Action Complaint (“SAC”), adding Community Health Systems, Inc. (“CHSI”) as a defendant.
The SAC alleged that defendants made misleading statements about Quorum’s goodwill and long-lived assets. The SAC alleged that on August 10, 2016, after the market closed, Quorum announced its financial results for the second quarter of 2016, reporting a substantial net loss and an operating loss for the quarter and approximately $250 million in impairment charges to Quorum’s goodwill and long-lived assets. The SAC alleged that as a result of this news, Quorum’s stock price declined approximately $4.99, or 49.8%, from $10.02 to $5.03.
On March 29, 2019, the Court issued an Order granting Plaintiff’s motion for class certification. The Class was certified as to all persons and entities who purchased or otherwise acquired Quorum Health Corporation common stock between May 2, 2016 and August 10, 2016, both dates inclusive.
Current Status of Case:
On June 9, 2020, the parties participated in their second full-day mediation. These negotiations resulted in the agreement to settle all claims of the Class against the defendants for $18,000,000 and an agreement was entered into on July 16, 2020. The settlement was preliminarily approved by the Court on July 27, 2020. The Court will hold a Settlement Fairness Hearing on November 30, 2020. This action is still ongoing.
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