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Investors who were record holders or beneficial owners of Covetrus Inc. common stock whose shares were exchanged for $21 per share in cash on Oct. 13, 2022, may be eligible to receive a cash payment from a class action settlement.
Clayton, Dubilier & Rice LLC and several individual defendants agreed to pay $70 million to settle a class action lawsuit alleging breaches of fiduciary duty and aiding and abetting such breaches in connection with the acquisition of Covetrus Inc. by affiliates of CD&R and TPG Global LLC. The lawsuit claimed CD&R used its position as a significant stockholder and board member to force Covetrus into the transaction at an unfair price.
Who are the class members?
The class includes all record holders and beneficial owners of Covetrus Inc. common stock (Nasdaq: CVET) whose shares were exchanged for $21 per share in cash on Oct. 13, 2022. This includes heirs, successors in interest, transferees and assigns.
Additional details
- Both individuals and entities can be class members.
- The class is certified solely for settlement purposes and is a non-opt-out class under Delaware Court of Chancery Rules 23(a), 23(b)(1) and 23(b)(2), meaning class members cannot exclude themselves from the settlement.
How much is the Covetrus payout?
The total settlement fund is $70,000,000. The settlement administrator will distribute the net settlement fund on a pro rata basis to all eligible class members based on the number of Covetrus shares they held at the closing of the transaction.
- The settlement administrator will determine the per-share recovery by dividing the net settlement fund by the total number of eligible shares. (The administrator will first deduct notice and administration costs, taxes, attorneys' fees and expenses and service awards from the total fund.)
- The parties estimate the settlement includes 105,579,524 eligible shares.
- The final net settlement fund and the total number of eligible shares at distribution will determine the actual per-share recovery.
No action needed to receive compensation
Eligible class members do not need to file a claim form or provide documentation. The settlement administrator will make payments automatically in the same manner as the original transaction consideration was paid. Those who have questions can contact the settlement administrator.
Settlement administrator's address: Covetrus Stockholder Litigation, c/o Settlement Administrator, 1650 Arch St., Suite 2210, Philadelphia, PA 19103
Phone number: 866-667-4259
email: info@CovetrusStockholderLitigation.com
Payout Methods
- For shares held in "street name," the settlement administrator will distribute payments through the Depository Trust & Clearing Corporation (DTCC) and its participants.
- For shares held directly (not through DTCC), the settlement administrator will send payments directly to the record holder.
$70 million settlement fund
The $70,000,000 settlement fund includes:
- Settlement administration costs: To be determined
- Attorneys' fees and expenses: Up to $14,700,000
- Service awards to class representatives: Up to $20,000 total
- Payments to eligible class members: The remainder of the fund
Important dates
- Fairness hearing: April 13, 2026
When is the Covetrus securities class action settlement payout date?
The settlement administrator will issue payments after the court resolves any appeals and grants final approval of the settlement.
Why did this class action settlement happen?
The class action lawsuit alleged Clayton, Dubilier & Rice LLC used its position as a significant Covetrus stockholder and board member to force the company into a transaction at an unfair price. The plaintiffs also alleged the defendants issued a materially misleading proxy statement to stockholders.
The defendants denied all allegations of wrongdoing and liability but agreed to settle to avoid the expense, inconvenience and distraction of continued litigation.
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