Former UnitedHealth CEO Settles Options Backdating Case
When you're hot, you're hot. And right now, no one in the plaintiffs bar is hotter than Coughlin Stoia Geller Rudman & Robbins, which has already had a great week, month, and year. On Monday, as you probably remember, a Texas federal judge approved $688 million in attorneys fees for the plaintiffs attorneys in the Enron shareholder class action, of which the lion's share will go to lead counsel Coughlin Stoia. Still more good news came the firm's way Wednesday, when the former CEO and chairman of UnitedHealth Group, William McGuire, agreed to pay $30 million to settle claims of illegally backdating stock options in a case in which Coughlin Stoia is representing the lead plaintiff, CalPERS. The firm has already wrangled $895 million from the company in that case.
As part of the deal, which is subject to approval by the federal district court in Minnesota, McGuire will also cancel options to purchase 3.68 million shares of UnitedHeath but does not admit to the allegations made in the class action complaint. (The deal also calls for the company's former general counsel, David Lubben, to pay $500,000.) McGuire is represented by a team of partners at Latham & Watkins: David Brodsky, Blair Connelly, and Alexandra Shapiro.
Credit Coughlin Stoia with squeezing McGuire to cough up what CalPERS said in a statement "is believed to be the largest cash recovery ever obtained from an individual defendant in a securities class action lawsuit." Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware, was even more emphatic in his comment to the AP: Elson called the size of the McGuire settlement "pretty amazing," adding, "It doesn't happen very often."
Unless you're Coughlin Stoia.