Omnicare has agreed to settle with its former CEO and other current and former directors of the long-term care pharmacy company.
In a legal notice posted on the company’s website, Omnicare and its former CEO, Joel Gemunder, and 11 other former or current directors or officers of the company have agreed to the creation of a $16.7 million settlement fund which will be used over the next four years to fund corporate governance measures and the board’s compliance committee. If the court agrees at the settlement fairness hearing, the settlement fund will also pay legal fees ($8.6 million) and expenses (not exceeding $222,332) related to the suit.
[See also: Omnicare whistle-blower suit settled]
The proposed settlement, approved by Omnicare’s board in May, resolves a suit brought by Manville Personal Injury Settlement Trust on behalf of Omnicare in April 2010. The suit claimed that Gemunder and the other defendants mismanaged and breached their fiduciary duties to the company by being party to or failing to detect violations of the federal Anti-Kickback Statue and the False Claims Act. The company also made claims of unjust enrichment in relation to Gemunder’s compensation.
The defendants deny any wrongdoing and have agreed to the settlement “solely in order to eliminate the substantial burden, expense, inconvenience and distraction of further protracted litigation.”
All parties agreed that they would not issue any press releases regarding the proposed settlement.
The settlement fairness hearing has been scheduled for Oct. 28 in the Kenton Circuit Court in Covington, Ky.
[See also: Omnicare doubles earnings]