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Tenet Healthcare: Unique settlement transforms governance

As co-lead counsel representing the State of New Jersey – Division of Investment, negotiated a groundbreaking multipart settlement in litigation arising from Tenet Healthcare’s (Tenet) manipulation of the Medicare Outlier reimbursement system and related misrepresentations and omissions.

The initial partial settlement included $215 million from Tenet, personal contributions totaling $1.5 million from two individual defendants—an unusual result in class action litigation—and numerous changes to the company’s corporate governance practices. A second partial settlement of $65 million from Tenet’s outside auditor, KPMG, addressed claims that it had provided false and misleading certifications of Tenet’s financial statements.  As a result of the settlement, various institutional rating entities now rank Tenet’s corporate governance policies among the strongest in the United States. 

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