8-KRegulation FD

CENTENE CORP 8-K Report, Regulation FD Disclosure (Nov 4, 2016)

Filed November 4, 2016For Securities:CNC

Summary

Centene Corporation (CNC) announced on November 4, 2016, a settlement agreement to resolve all litigation stemming from the termination of its subsidiary Kentucky Spirit Health Plan's contract with the Commonwealth of Kentucky in July 2013. This settlement brings to a close a period of legal disputes that included multiple lawsuits and complaints filed by both Centene and the Commonwealth, alleging breach of contract and seeking damages. The terms of the settlement are financially immaterial to Centene. Kentucky Spirit will receive a minor cash payment from the Commonwealth's actuarial firm, and all claims between the parties will be dismissed with prejudice. Importantly, both Centene and the Commonwealth have mutually agreed that neither party acted in bad faith, acknowledging the complex nature of the contractual dispute and the good-faith efforts made to resolve it. This resolution removes a significant, albeit immaterial, legal overhang for the company.

Key Highlights

  • 1Settlement reached to resolve all litigation related to Kentucky Spirit Health Plan's contract termination with the Commonwealth of Kentucky.
  • 2Litigation involved numerous lawsuits and complaints filed by both Centene and the Commonwealth.
  • 3The settlement agreement dismisses all claims with prejudice.
  • 4Kentucky Spirit Health Plan will receive an immaterial cash payment from the Commonwealth's actuarial firm.
  • 5Both parties have agreed that neither acted in bad faith and took reasonable positions.
  • 6This resolution removes legal uncertainty regarding the 2013 contract termination.

Frequently Asked Questions

The 8-K filing announces that Centene Corporation, through its subsidiary Kentucky Spirit Health Plan, has entered into a settlement agreement to resolve all outstanding litigation related to the termination of a contract with the Commonwealth of Kentucky in 2013.

The settlement is financially immaterial to Centene Corporation. The company's subsidiary will receive only an immaterial cash payment from the Commonwealth's actuarial firm, and all legal claims will be dismissed.

The litigation arose from Kentucky Spirit Health Plan's termination of its contract with the Commonwealth of Kentucky in July 2013, based on the subsidiary's belief that it had a contractual right to terminate. This led to mutual allegations of breach of contract and claims for damages.

'Dismissed with prejudice' means that the lawsuits are permanently ended, and the parties cannot bring the same claims against each other again in the future. This provides finality to the legal disputes.