Tenet Healthcare Corporation (NYSE:THC)

In the Tenet shareholder derivative litigation, the plaintiffs brought derivative claims for breach of fiduciary duty, gross mismanagement, waste of corporate assets, abuse of control, and unjust enrichment against the top officers and directors of Tenet Healthcare Corporation, one of the largest for-profit health care service companies in the United States.  Plaintiffs alleged that Tenet’s top executives breached their fiduciary duties to the company by failing to monitor, investigate, and oversee Tenet’s patient procedures, Medicare billing, and accounting practices.  As co-lead counsel for the plaintiffs, Robbins Arroyo attorneys engaged in extensive motion practice and reviewed tens of thousands of pages of SEC filings, media and analyst reports, and company documents produced by Tenet during discovery.

After prosecuting the case for over three years, Robbins Arroyo LLP’s attorneys negotiated a comprehensive settlement, which included $51.5 million in cash contributions to Tenet and sweeping corporate governance reforms and remedial measures designed to ensure the independence and accountability of the company’s board of directors.  The new governance regime included separation of the positions of CEO and Chairman so that no single individual can hold both positions, strict internal financial controls, enhanced guidelines for stock ownership and stock retention, and a comprehensive insider trading policy. The settlement was upheld on appeal.

In re Tenet Healthcare Corp. Derivative Litigation, No. 01098905 (Cal. Super Ct.–Santa Barbara County May 5, 2006), aff’d, No. B192252 (Cal. App. Sept. 20, 2007).

 

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