Oxford Health Plans, Trumbull, Conn., agreed to pay $225 million to settle a class-action lawsuit over the company's 1997 drop in share price, which was prompted by information systems problems, and will take a related pretax charge of $40 million to $45 million in the first quarter. The company previously incurred litigation-related charges of $151.3 million and $20 million. Oxford's insurers agreed to cover only $25 million of the settlement, leaving the company with the remaining $200 million, plus an $8 million premium. Oxford said it is considering legal action against the carriers to recoup at least $32.3 million. The company lost $3.4 billion of its market value in 1997 after revealing its finances were in disarray because of a computer system problem. It was hit with more than 50 lawsuits, which were consolidated in U.S. District Court in New York. -- by Laura B. Benko
Oxford resolves suits related to 1997 IT disaster
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.