Coram Healthcare Corp. has agreed to pay more than $25 million to settle a shareholder class-action lawsuit filed against its subsidiary, T2 Medical, and several former T2 officers.
The alternate-site healthcare company will pay T2 shareholders $25 million in cash and issue warrants to repurchase more than 2.5 million shares of T2 stock at an initial purchase price of $20.25 per share, executives said.
In August 1993, a group of T2 shareholders filed a class-action lawsuit against the company in U.S. District Court in Atlanta. They accused the company, Chairman Thomas Haire and former Chief Executive Officer Joseph Allegra, M.D., of misrepresentation and securities fraud (Aug. 23, 1993, p. 10).
As part of the settlement, T2 and the executives named in the lawsuit deny any wrongdoing or liability.
The announcement comes two weeks after T2 agreed to pay federal authorities $500,000 and discontinue its controversial business arrangements with physicians to settle fraud charges against the company (Oct. 3, p. 58). In that settlement, T2 also denied any wrongdoing.
Formed in July through the merger of T2 and three other home infusion firms, Coram is the nation's second-largest alternate-site healthcare provider.