Gardy & Notis, LLP achieves $930 million settlement of stock options backdating claims

Lead counsel Gardy & Notis, LLP is pleased to announce that a record settlement has been reached in the shareholder derivative lawsuit on behalf of UnitedHealth Group Inc. (NYSE: UNH) in an action titled In re UnitedHealth Group Inc. Derivative Litigation, Case No. 27-CV-06-8085, in the Minnesota District Court for Hennepin County before Judge George F. McGunnigle. The derivative action named various current and former officers and directors as defendants in connection with what to date is the largest backdating options scheme.

The settlement is the largest shareholder derivative action settlement ever achieved as well as the largest settlement of any case involving backdated stock options. The settlement includes forfeited options, option repricings and/or relinquishment of certain other employment benefits by former CEO William W. McGuire, former General Counsel Donald J. Lubben, and current CEO Stephen J. Hemsley and others, the total value of which is approximately $895 million (Black Scholes) or $930 million (intrinsic). Additionally, William G. Spears, a UnitedHealth director who was Chairman of the Company's Compensation Committee of the board of directors and who resigned earlier, has agreed, as part of the settlement, to binding arbitration to determine what he should pay as an additional contribution to the settlement.

The settlement was reached as a result of a lengthy mediation among the plaintiffs, and the Special Litigation Committee appointed by the UnitedHealth board of directors that has been investigating the backdated options scheme. Former Minnesota Supreme Court Chief Justice Kathleen A. Blatz and former Justice Edward C. Stringer were members of the Special Litigation Committee. The mediator for the mediation was former U.S. District Court Judge Layn R. Phillips.

In approving the settlement, the Court found:

"Plaintiffs‟ Counsel spent significant time and labor prosecuting this lawsuit. They reviewed millions of pages of documents, performed legal research, engaged in motion practice, and participated in the proceedings before the Minnesota Supreme Court and in lengthy settlement discussions.... The benefits of the settlement are in the hundreds of millions of dollars. Plaintiffs‟ Counsel contributed to the excellent results. They demonstrated considerable skill and determination. The state lawsuit contributed to the voluntary repricing and surrender of stock options by McGuire, Lubben, and other UH executives, and to corporate governance reforms. The amount involved is enormous, and the results obtained excellent."

The case is In re UnitedHealth Group Incorporated Derivative Litigation, Case No. 27-CV-06-8085, Minnesota District Court, Hennepin County.