Summary
McKesson Corporation (MCK) filed an 8-K report on January 18, 2005, to disclose a significant development regarding its legal proceedings. The company announced an agreement to settle a consolidated securities class action lawsuit related to its former subsidiary, HBO & Company (HBOC). This settlement involves a cash payment of $960 million to class members, subject to court approval. Furthermore, the company disclosed that this settlement, combined with a reserve for remaining litigation stemming from a 1999 financial restatement, will result in a substantial pre-tax charge of $1.2 billion, or $810 million after-tax, for the third fiscal quarter ended December 31, 2004. This charge translates to approximately $2.70 per share, which is a material impact on the company's financial results for the period.
Key Highlights
- 1McKesson has reached an agreement to settle a consolidated securities class action lawsuit for $960 million in cash.
- 2The lawsuit involves the company and its former subsidiary, HBO & Company (HBOC).
- 3The settlement is contingent upon obtaining preliminary and final court approval.
- 4The company will record an aggregate pre-tax charge of $1.2 billion for the third fiscal quarter of 2005.
- 5The after-tax charge is estimated at $810 million, impacting earnings per share by approximately $2.70.
- 6The charge is a result of both the class action settlement and a reserve for ongoing litigation related to a 1999 financial restatement.