SAN FRANCISCO -- Health services giant McKesson Corp. said yesterday it has agreed to repay shareholders $960 million to settle a class-action lawsuit related to an accounting scandal that has resulted in criminal convictions of several former executives.
The case consolidated several class-action lawsuits brought on behalf of McKesson's shareholders burned by the financial shenanigans that occurred when the company bought software maker HBO & Co. in 1999.
The company said yesterday it would establish a $1.2 billion reserve for the payout and future claims stemming from 16 still-unresolved shareholder lawsuits.
The expense will saddle San Francisco-based McKesson with a net charge of $810 million, or $2.70 per share, in its quarter just completed in December.
The settlement "represents a significant step toward fully resolving the uncertainty related to this unfortunate chapter in the company's history and allows us to focus once again only on the future," said McKesson chairman John H. Hammergren.
McKesson has been fighting dozens of lawsuits since an internal investigation concluded that HBOC had been fabricating revenue in the years leading up to its $12 billion sale.
After detecting the fraud, McKesson restated its financial results for 1998 and the first three months of 1999. The disclosures caused McKesson's stock to lose nearly half its value, wiping out $9 billion in shareholder wealth