Summary
McKesson Corporation (MCK) filed an 8-K on February 26, 2007, to disclose a significant development in a previously disclosed securities class action lawsuit. The company's subsidiary, D&K Healthcare Resources LLC, entered into a settlement agreement with class action plaintiffs. This settlement, if approved by the court, will resolve all claims by D&K shareholders against all defendants for a payment of $18.7 million. While a substantial payment, McKesson had previously reserved an estimated liability for this litigation when D&K was acquired in fiscal 2006. Consequently, the company anticipates that the final settlement amount will not materially impact its financial results for the fourth quarter of fiscal 2007. It is important for investors to note that all defendants deny any wrongdoing and have agreed to the settlement to avoid the costs and uncertainties of continued litigation.
Key Highlights
- 1McKesson's subsidiary, D&K Healthcare Resources LLC, reached a settlement in a securities class action lawsuit.
- 2The settlement amount is $18.7 million.
- 3The lawsuit involved claims by D&K shareholders against the company and other defendants.
- 4McKesson had previously established a reserve for this litigation in fiscal 2006.
- 5The settlement is not expected to materially impact McKesson's financial results for the fourth quarter of fiscal 2007.
- 6The settlement is subject to court approval and other conditions.
- 7All defendants deny any violation of law.