8-KOther Events

MCKESSON CORP 8-K Report, Corporate Update (Jan 20, 2006)

Filed January 20, 2006For Securities:MCK

Summary

McKesson Corporation (MCK) filed an 8-K on January 20, 2006, reporting a significant legal development. The Supreme Court for the State and County of New York denied Bear Stearns & Co. Inc.'s petition for an injunction. This ruling prevents Bear Stearns from prohibiting McKesson from proceeding with its proposed settlement in the consolidated securities class action, In re McKesson HBOC, Inc. Securities Litigation. Bear Stearns had alleged that McKesson's settlement, without fully releasing claims against Bear Stearns, constituted a breach of their engagement letter from a 1999 acquisition. The denial of the injunction is a positive step for McKesson as it allows the company to move forward with the class action settlement, with a final approval hearing scheduled for January 27, 2006, in the U.S. District Court for the Northern District of California. Investors should monitor the outcome of this final approval hearing.

Key Highlights

  • 1McKesson Corporation (MCK) received a favorable ruling from the New York Supreme Court regarding a lawsuit filed by Bear Stearns & Co. Inc.
  • 2The court denied Bear Stearns' petition for an injunction, which sought to block McKesson's proposed settlement in the In re McKesson HBOC, Inc. Securities Litigation.
  • 3Bear Stearns' lawsuit alleged a breach of an engagement letter from a 1999 acquisition, related to the terms of the class action settlement.
  • 4The ruling allows McKesson to proceed with the settlement agreement for the consolidated securities class action.
  • 5A final approval hearing for the class action settlement is scheduled for January 27, 2006, in the U.S. District Court for the Northern District of California.
  • 6This development is significant as it removes an immediate legal obstacle to resolving a long-standing class action lawsuit.

Frequently Asked Questions

The key development is that the Supreme Court for the State and County of New York denied Bear Stearns & Co. Inc.'s request for an injunction that would have prevented McKesson Corporation from proceeding with its proposed settlement in the In re McKesson HBOC, Inc. Securities Litigation.

Bear Stearns sued McKesson alleging that the company's proposed settlement in the securities class action, which did not provide a full release of class plaintiffs' claims against Bear Stearns, constituted a breach of the engagement letter under which Bear Stearns advised McKesson during a 1999 acquisition.

The next significant step is a final approval hearing for the class action settlement, which is scheduled to take place on January 27, 2006, in the United States District Court for the Northern District of California.

No, the lawsuit is not fully resolved. While the company received a favorable ruling on Bear Stearns' injunction request, a final approval hearing for the class action settlement is still pending on January 27, 2006. The outcome of this hearing will determine the final resolution of the class action.