June 11, 2021
- Dispute over United Health senior fitness program competition
- Investors previously beat back attempt to decertify class
Fitness program provider Tivity Health Inc. investors who say the company failed to adequately disclose that United Healthcare was transforming from one of Tivity’s largest clients into a competitor asked a federal judge in Tennessee to preliminarily approve a $7.5 million settlement to resolve the securities fraud class claims.
Individual investor Eric Weiner sued Tivity in November 2017, saying the company artificially inflated the price of its securities by making false or misleading statements about its “SilverSneakers” senior fitness program’s business prospects.
The complaint alleged Tivity didn’t inform investors that United Healthcare, which together with Humana Inc. accounted for 36% of Tivity’s revenue in 2016, was expanding its fitness benefit to seniors and becoming a direct competitor.
Oklahoma Firefighters Pension and Retirement System was appointed lead counsel the following year, and the U.S. District Court for the Middle District of Tennessee certified an investor class in 2020. In March, investors beat back an attempt to decertify the class based on its purported prior knowledge of the competition.
The pension fund on Thursday urged the court to give an initial nod to the agreement-in-principle that would provide $7.5 million in cash in exchange for full release of all claims.
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