Performant Financial Corporation (NASDAQ:PFMT) Files An 8-K Other Events

Performant Financial Corporation (NASDAQ:PFMT) Files An 8-K Other Events
Item 8.01 Other Events.

On September 17, 2020, Shiva Stein (“Plaintiff”) filed a Verified Stockholder Class Action Complaint (the “Complaint”) in the Court of Chancery of the State of Delaware against the Company and the members of its board of directors (the “Board”) captioned Shiva Stein v. Performant Financial Corporation, et al., C.A. No. 2020-0791-AGB (the “Action”). In the Action, Plaintiff alleged that the defendants breached their fiduciary duties of care and loyalty by allowing uninstructed shares to be purportedly “cast” as votes “For” a proposal to approve an amendment to our Certificate of Incorporation (the “Certificate”) authorizing the Board to effect a reverse stock split at a ratio ranging from 1 share-for-5 shares up to a ratio of 1 share-for-20 shares (the “Reverse Split Proposal”). Plaintiff sought to enjoin the declaration of any reverse stock split to any amendment to the Certificate effected in connection with the Reverse Split Proposal.
While the Company and the Board deny completely all of the allegations of wrongdoing in the complaint, on October 19, 2020, the Company filed with the U.S. Securities and Exchange Commission, a Form 8-K/A Current Report informing stockholders that following the filing of the Original 8-K, the Company was informed of an inconsistency related to broker discretion to vote shares for which a broker had not received instructions from the beneficial owner with respect to Proposal No. 3 (regarding the approval of an amendment of the Company’s certificate of incorporation to effect a reverse stock split of the outstanding shares of its common stock); that, without informing the Company, some but not all brokers treated Proposal No. 3 as a “routine” proposal despite the proxy materials for the Annual Meeting describing Proposal No. 3 as a “non-routine” proposal; and that, due to this inconsistency, the Company will not effect a reverse stock split at this time and will instead submit a new “routine” proposal to its stockholders, at a later date and subject to a new proxy statement, to amend its certificate of incorporation to effect a reverse stock split (the “Amended 8-K”). As a result of the Amended 8-K, Plaintiff agreed that her claims were moot and stipulated to dismissal of her claims.
On November 18, 2020, the Court entered a Stipulation and Order providing that Plaintiff’s action would be dismissed with prejudice only as to Plaintiff and the case will be closed. On February 19, 2021, Plaintiff and the Company entered into a settlement agreement under which the Company agreed to pay $100,000 in fees and expenses to Plaintiff’s counsel. The Court has not passed on the amount of fees and expenses. The description of the order is qualified in its entirety by reference to the order, which is attached as an exhibit hereto.
Plaintiff’s Counsel are Gustavo F. Bruckner of Pomerantz LLP, (212) 661-1100, Christopher J. Kupka of Fields Kupka & Shukurov LLP, (212) 231-1500, and Brian E. Farnan of Farnan LLP, (302) 777-0300, and the Company’s counsel are Bruce A. Ericson, Pillsbury Winthrop Shaw Pittman LLP, (415) 983-1000 and David J. Teklits, Morris, Nichols, Arsht & Tunnell LLP, (877) 772-6628.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 Stipulation and Order, United States District Court, Court of Chancery of the State of Delaware, dated November 18, 2020.
Performant Financial Corp Exhibit
EX-99.1 2 judgereviewed_74001629xp.htm EX-99.1 judgereviewed_74001629xp – 1 – IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE SHIVA STEIN,…
To view the full exhibit click here

Story continues below

About Performant Financial Corporation (NASDAQ:PFMT)

Performant Financial Corporation (Performant) provides technology-enabled recovery and related analytics services in the United States. The Company’s services identify and recover delinquent or defaulted assets and improper payments for both government and private clients in a range of markets. The Company provides its services on an outsourced basis where the Company handles many or all aspects of its clients’ recovery processes. The Company uses its technology-enabled services platform to provide recovery and analytics services in a range of markets for the identification and recovery of student loans, improper healthcare payments and delinquent state tax and federal treasury receivables. It provides recovery services to the government-supported student loan industry and its clients include the Department of Education and Guaranty Agencies, as well as private financial institutions. The Company provides recovery services related to improper payments in the healthcare market.

An ad to help with our costs