Item 8.01. Other Events.
On June 22, 2023 Clover Health Investments, Corp. (the "Company" or "Clover Health") announced that it has reached an agreement to resolve seven derivative lawsuits pending in Delaware, New York, and Tennessee courts (collectively, the “derivative lawsuits”). The proposed derivative settlement contains no admission of liability or wrongdoing by any of the defendants and is subject to definitive documentation and final court approval. Along with the settlement of the securities class action described in the Company’s April 24, 2023 press release and Current Report on Form 8-K, the Company has now reached settlements for all of the outstanding civil litigation that was filed in the wake of its de-SPAC transaction in January 2021.
On June 21, 2023, the plaintiffs in the derivative lawsuits, one the one hand, and the Company, on the other hand, entered into a memorandum of understanding providing for the settlement of the derivative actions. Subject to negotiation of definitive documentation and final court approval, the defendants in the derivative lawsuits will receive customary releases and the Company will implement a suite of corporate governance enhancements. The settlement does not involve any monetary payment, other than payment of an award of fees and expenses to plaintiffs’ counsel, which has not yet been set.
The derivative lawsuits described above are captioned In re: Clover Health Investments, Corp. Derivative Litig., No. 21-CV-191 (D. Del.); Wiegand v. Garipalli, et al., No. 21-CV-1053 (D. Del.); Sun v. Garipalli, et al., No. 21-CV-311 (M.D. Tenn.); Luthra v. Garipalli, et al., No. 21-CV-320 (M.D. Tenn.); In re Clover Health Investments, Corp. Stockholder Derivative Litig., Index No. 655420/2021 (N.Y. Sup. Ct., N.Y. Cnty.); Uvaydov v. Palihapitiya, et al., Index No. 656978/2021 (N.Y Sup. Ct., N.Y. Cnty.); Davies v. Garipalli et al., No. 2021-1016-SG (Del. Ch.).
A copy of the press release announcing the agreement described herein is filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
Forward-Looking Statements
Please note that this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding future events and Clover Health’s future results of operations, financial position, business strategy and future plans. Forward-looking statements are not guarantees of future performance, and you are cautioned not to place undue reliance on such statements. In some cases, you can identify forward looking` statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "going to," "can," "could," "should," "would," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," "outlook," "forecast," "guidance," "objective," "plan," "seek," "grow," "target," "if," "continue," or the negative of these words or other similar terms or expressions that concern Clover Health's expectations, strategy, priorities, plans or intentions. Forward-looking statements in this report include, but are not limited to, statements regarding the litigation and proposed settlement, including definitive documentation and final court approval, as well as expectations related to Clover Health's liquidity, future performance, future operations and future results. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied in this report. Additional information concerning these and other risk factors is contained in Clover Health’s latest Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 1, 2023 and Quarterly Report on Form 10-Q filed with the SEC on May 9, 2023, in each case, including the Risk Factors sections therein, and in its other filings with the SEC. The forward-looking statements included in this report are made as of the date hereof. Except as required by law, Clover Health undertakes no obligation to update any of these forward-looking statements after the date of this report or to conform these statements to actual results or revised expectations.
