AG Dann puts the heat on for both STRS and OPERS stakeholders
Ohio AG questions decisions of UNH options probe committee
Minneapolis / St. Paul Business Journal - 4:44 PM CST Wednesday, February 7, 2007
by Carissa Wyant, Staff Writer
In a letter sent Wednesday to two former Minnesota justices in charge of UnitedHealth Group Inc.'s (UNH) board-appointed special litigation committee, Ohio Attorney General Marc Dann said a rushed settlement may be unfair to the company's shareholders.
Minnetonka-based UnitedHealth (NYSE:UNH) drew scrutiny last year in a stock-options backdating scandal that forced the retirement of former CEO William McGuire in December.
In his letter, Dann writes to Kathleen Blatz and Edward Stringer. As attorney general, Dann serves as fiduciary for two Ohio pension funds that collectively owned 5.6 million shares of UnitedHealth common stock, the Public Employees' Retirement System of Ohio and State Teachers' Retirement System of Ohio. Dann's letter states shares of UnitedHealth common stock possessed by his clients were worth more than $295 million, and at its peak value, that stock was worth more than $360 million.
The letter challenges the committee for a last-minute cancellation of a recent meeting with Dann and the lead plaintiff's attorney representing the Ohio pension funds in their shareholder derivative litigation. It goes on to say, " I strongly urge you to involve the derivative plaintiffs in that process."
The letter raises questions as to whether the committee authorized motions to pursue dismissal of the derivative action and whether it will be pursuing a suit against McGuire, who received some $1.6 billion in options and nearly $60 million in other compensation. Dann's letter also challenges the committee as to why it did not question UNH's appointment of Stephen Hemsley as CEO after he received more than $700 million in backdated options, as well as why the committee has not completed its own investigation after seven months on the job.
UnitedHealth appointed Blatz and Stringer to investigate whether UNH has claims against certain company directors related to the options scandal. UNH is obligated to pursue those claims depending on the investigation's outcome.
UnitedHealth spokesman Don Nathan insisted the special litigation committee is "fully independent" from the company.
As for why the committee canceled its meeting with the Ohio representatives, "It would be pure speculation as to what the committee process fully entails and any outcomes," Nathan said. "The company was not aware of this proposed meeting or anything surrounding it."
cwyant@bizjournals.com | (612) 288-2108
And from today's Akron Beacon Journal comes an additional comment from AG Dann:
"New Ohio Attorney General Marc Dann said the special litigation committee had asked to meet with attorneys from his office on Feb. 1, but canceled on Jan. 31 when they found out he planned to attend personally.
"The cancellation 'gives me a sinking feeling that perhaps they're not sincere in their efforts ... to do what's necessary to protect the corporation's interest,' he said Wednesday.
"McGuire stood to receive a multimillion dollar payout after stepping down from UnitedHealth on Nov. 30, but that has been on hold until the special litigation committee finishes its work. Dann said he fears the committee is cutting shareholders out of negotiations with McGuire."
Minneapolis / St. Paul Business Journal - 4:44 PM CST Wednesday, February 7, 2007
by Carissa Wyant, Staff Writer
In a letter sent Wednesday to two former Minnesota justices in charge of UnitedHealth Group Inc.'s (UNH) board-appointed special litigation committee, Ohio Attorney General Marc Dann said a rushed settlement may be unfair to the company's shareholders.
Minnetonka-based UnitedHealth (NYSE:UNH) drew scrutiny last year in a stock-options backdating scandal that forced the retirement of former CEO William McGuire in December.
In his letter, Dann writes to Kathleen Blatz and Edward Stringer. As attorney general, Dann serves as fiduciary for two Ohio pension funds that collectively owned 5.6 million shares of UnitedHealth common stock, the Public Employees' Retirement System of Ohio and State Teachers' Retirement System of Ohio. Dann's letter states shares of UnitedHealth common stock possessed by his clients were worth more than $295 million, and at its peak value, that stock was worth more than $360 million.
The letter challenges the committee for a last-minute cancellation of a recent meeting with Dann and the lead plaintiff's attorney representing the Ohio pension funds in their shareholder derivative litigation. It goes on to say, " I strongly urge you to involve the derivative plaintiffs in that process."
The letter raises questions as to whether the committee authorized motions to pursue dismissal of the derivative action and whether it will be pursuing a suit against McGuire, who received some $1.6 billion in options and nearly $60 million in other compensation. Dann's letter also challenges the committee as to why it did not question UNH's appointment of Stephen Hemsley as CEO after he received more than $700 million in backdated options, as well as why the committee has not completed its own investigation after seven months on the job.
UnitedHealth appointed Blatz and Stringer to investigate whether UNH has claims against certain company directors related to the options scandal. UNH is obligated to pursue those claims depending on the investigation's outcome.
UnitedHealth spokesman Don Nathan insisted the special litigation committee is "fully independent" from the company.
As for why the committee canceled its meeting with the Ohio representatives, "It would be pure speculation as to what the committee process fully entails and any outcomes," Nathan said. "The company was not aware of this proposed meeting or anything surrounding it."
cwyant@bizjournals.com | (612) 288-2108
And from today's Akron Beacon Journal comes an additional comment from AG Dann:
"New Ohio Attorney General Marc Dann said the special litigation committee had asked to meet with attorneys from his office on Feb. 1, but canceled on Jan. 31 when they found out he planned to attend personally.
"The cancellation 'gives me a sinking feeling that perhaps they're not sincere in their efforts ... to do what's necessary to protect the corporation's interest,' he said Wednesday.
"McGuire stood to receive a multimillion dollar payout after stepping down from UnitedHealth on Nov. 30, but that has been on hold until the special litigation committee finishes its work. Dann said he fears the committee is cutting shareholders out of negotiations with McGuire."
posted by Kathie Bracy at 8:46 PM
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