A Collaboration with the University of Pittsburgh

Tenet Healthcare to pay $215 million to settle shareholder lawsuits

[JURIST] Tenet Healthcare [corporate website], the country's second-largest private hospital chain, on Thursday agreed to a $215 million settlement [press release] to end class action shareholder lawsuits alleging that some of the company's officers and directors misled investors about Medicare expenses. The for-profit company confirmed that insurance will cover $75 million of the settlement, while former chairman and CEO Jeffrey Barbakow and former COO Thomas Mackey, who both resigned in 2003, will contribute $1 million and $500,000 respectively. The lawsuits, originally filed in 2002, contained accusations of breach of fiduciary duty, mismanagement and unjust enrichment. US District Courts in Los Angeles and Santa Barbara, California must approve the settlements since they would end pending litigation in those courts. The company still faces DOJ and SEC investigations into alleged billing misconduct [JURIST report]. Bloomberg has more.

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

© Copyright JURIST Legal News and Research Services, Inc., 2013.