Walgreens reaches $105 million settlement with shareholders

June 24 (Reuters) – Walgreens Boots Alliance Inc (WBA.O) agreed to pay $105 million to settle a long-running class-action lawsuit accusing it of deceptive shareholders about how rising generic drug costs and reimbursement pressures would damage its pharmacy enterprise.

The preliminary all-cash settlement was filed on Thursday in a federal court docket in Chicago following six months of mediation, and requires a choose’s approval.

Walgreens denied wrongdoing, however settled to keep away from the uncertainty, burden and value of additional litigation, settlement papers present. The corporate didn’t instantly reply on Friday to requests for added remark

Shareholders stated Walgreens inflated its inventory worth in 2014 by concealing dangerous information about drug costs and reimbursement charges, so traders may concentrate on its then-pending merger with Switzerland’s Alliance Boots GmbH.

The challenged statements involved Walgreens’ outlook for its 2016 fiscal 12 months, the primary full 12 months after the Deerfield, Illinois-based firm anticipated to finish the merger.

Walgreen Co, as the corporate was then recognized, lowered its forecast for that 12 months on Aug. 6, 2014. The merger closed on the finish of 2014, and the lawsuit was filed in April 2015.

Thursday’s settlement covers Walgreen shareholders from April 17 to Aug. 5, 2014. The lead plaintiff is Industriens Pensionsforsikring A/S, a Danish pension fund. Walgreens’ rivals embrace CVS Well being Corp (CVS.N) and Ceremony Help Corp (RAD.N).

A associated shareholder lawsuit accusing Walgreen officers and administrators of poor oversight has been on maintain pending a decision of the category motion. Attorneys for the plaintiffs in that case didn’t instantly reply to requests for remark.

The case is Washtenaw County Workers Retirement System et al v Walgreen Co et al, U.S. District Court docket, Northern District of Illinois, No. 15-03187.

Reporting by Jonathan Stempel in New York; modifying by Jonathan Oatis

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