What is the total financial impact of these settlements on McKesson?

The most significant financial impact comes from the $960 million securities class action settlement, which McKesson is responsible for paying (plus potential interest). While the derivative action settlement brings in $30 million from insurers, McKesson will pay $6 million of that towards attorney fees, resulting in a net inflow of $24 million from that specific settlement to the company. The primary outflow is the $960 million payment for the class action.

When is McKesson required to pay the $960 million settlement?

McKesson is required to pay the $960 million settlement amount, plus any accrued interest, no later than 7 days after the Effective Date. If no appeal is filed, the earliest this payment could be due is April 3, 2006. McKesson does have the option to pay the settlement amount earlier.

What was the nature of the In re McKesson HBOC, Inc. Securities Litigation?

This was a consolidated securities class action lawsuit. While the 8-K doesn't detail the specifics of the original allegations, such lawsuits typically involve claims that the company made materially misleading statements or omissions regarding its financial performance or business operations, leading investors to suffer losses.

Who is paying the $30 million in the derivative action settlement, and what does it resolve?

McKesson's insurance companies are paying the $30 million settlement consideration. This settlement resolves a derivative action and provides a release for McKesson's potential claims against eighteen present or former directors or officers of McKesson or HBO & Company.

MCK 8-K SEC Disclosure — Feb 28, 2006

Summary

McKesson Corporation (MCK) filed an 8-K on February 27, 2006, to report the finalization of two significant legal settlements. The most substantial is the $960 million settlement in the consolidated securities class action, In re McKesson HBOC, Inc. Securities Litigation. This settlement, formally approved by a Final Judgment and Order of Dismissal on February 24, 2006, resolves claims against the company and related entities. Payment of the settlement amount, plus potential accrued interest, is due by April 3, 2006, unless an appeal is filed. The filing also details the approval of a derivative action settlement in Saito, et al. v. McCall, et al. on February 21, 2006. Under this settlement, the company's insurers will pay $30 million to McKesson in exchange for a release of claims against 18 past or present directors and officers. The company will pay $6 million in attorney fees to the plaintiffs' counsel from this settlement consideration. These developments mark a significant step in resolving long-standing legal matters for McKesson.

Key Highlights

1Final approval and dismissal of the $960 million securities class action settlement in In re McKesson HBOC, Inc. Securities Litigation.
2Payment of the $960 million settlement, plus accrued interest, is anticipated by April 3, 2006, if no appeal is filed.
3Approval of a derivative action settlement where McKesson's insurers will pay $30 million.
4The $30 million from the derivative settlement will be used to release potential claims against 18 current or former directors/officers.
5McKesson will pay $6 million in attorney fees to plaintiffs' counsel in the derivative action, funded from the $30 million settlement.
6The filing includes the Final Judgment and Order of Dismissal for the securities class action as an exhibit.

MCKESSON CORP 8-K Report, Corporate Update (Feb 28, 2006)

Summary

Key Highlights

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