10 Mar Merge announces agreement to settle stock case
Milwaukee, Wis. – Merge Healthcare has reached agreement in principle with the plaintiff and other defendants in a derivative action against the Milwaukee-based medical software developer.
Merge has agreed to a one-time cash payment of $250,000 for legal costs incurred by the plaintiff in the case. In addition, the settlement will reflect that Merge and the other defendants continue to deny that they have committed or attempted to commit any violations of law or breached any duty owed to the company or its shareholders.
The agreement provides for the settlement and release and dismissal of all claims asserted by plaintiff against Merge, but the company has not released any claims against former executives. The settlement is subject to approval by the court.
The company, which saw several top executives resign in 2006 following the disclosure of improper accounting and financial reporting practices, was the subject of class action lawsuits filed by people who bought shares of Merge between Aug. 2, 2005 and March 16, 2006. The lawsuits claimed that the company issued false statements related to the purchase of Cedara Software, which Merge acquired in June of 2005 for $325 million.
Merge has received $1,050,000 in cash from its primary directors and officers’ liability insurance carrier for reimbursement of legal expenses in connection with the class action and derivative action against the company and some of its current and former directors and officers.
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