August 1, 2025
A federal judge in Colorado has granted preliminary approval of a $27 million settlement in a securities lawsuit brought against InnovAge Holding Corp. by Cohen Milstein on behalf of its clients the El Paso Firemen & Policemen’s Pension Fund, the San Antonio Fire & Police Pension Fund, and the Indiana Public Retirement System.
The settlement would end three years of hard-fought litigation against multiple defendants: InnovAge, a healthcare provider specializing in senior care; certain of its former executives; private equity firms— Apax Partners and Welsh, Carson, Anderson & Stowe—who owned controlling stakes in InnovAge; and underwriters of InnovAge’s initial public offering.
Lead Plaintiffs alleged that Defendants made false and misleading statements regarding InnovAge’s regulatory compliance, the quality of its care model, and the viability of its growth strategy. Government audits uncovered significant compliance violations, including woefully understaffed care centers. The sanctions that followed, including an enrollment freeze, hindered InnovAge’s ability to grow and caused the stock price to plummet, according to Lead Plaintiffs’ complaint.
“When private equity pushes for profits in the healthcare space, it raises risks for patients and shareholders alike,” said Molly Bowen, a partner on Cohen Milstein’s InnovAge team. “By fighting for and obtaining this excellent result, our clients showed how engaged pension funds can hold public companies accountable for fraud and benefit their fellow investors.”
The three Lead Plaintiffs and Lead Counsel Cohen Milstein conducted extensive discovery and motions practice that provided ample evidence about the strengths and risks of the case. Lead Plaintiffs investigated, drafted, and filed a detailed amended complaint and defeated, in large part, Defendants’ repeated motions to dismiss. They engaged in substantial fact discovery, including exchange of document requests and interrogatories, production of hundreds of thousands of pages of documents, serving subpoenas on third parties, and conducting Rule 30(b)(6) depositions of the Lead Plaintiffs and their three investment managers—a total of eight individuals representing six different entities. Lead Plaintiffs also successfully moved for class certification, supported by an expert report on market efficiency and damages.
The $27 million settlement is a class-wide recovery that exceeds the typical recovery in securities class actions, particularly for a case where most damages stem from claims arising under a company’s statements in connection with an initial public offering.
The result is even more remarkable considering the particular challenges presented by InnovAge’s precarious financial state. In virtually all cases, extending litigation for years—through additional dispositive motions, trial, and appeals—carries a risk that the class might recover less (or even nothing). Here, InnovAge’s limited insurance and a significant decline in its stock price during the litigation heightened that risk. During the litigation, InnovAge’s stock price fell from around $6.50 per share to as low as $2.75 per share, raising a risk that the company would have difficulty funding a settlement.
On June 17, 2025, US District Judge William J. Martinez granted preliminary approval of the settlement in the case, which is captioned El Paso Firemen & Policemen’s Pension Fund v. InnovAge Holding Corp. (21-cv-02270-WJM-SBP (D. Colo.).
In the coming months, Cohen Milstein will work with the court-approved claims administrator to oversee the process of disseminating notice of the settlement. Impacted investors can find more information at https://www.strategicclaims.net/innovage/. Judge Martinez scheduled a final approval hearing for November 26, 2025.