{"id":5354,"date":"2012-08-21T00:00:00","date_gmt":"2012-08-21T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2012\/08\/amerigroup_shareholders_claim"},"modified":"2022-04-28T15:46:58","modified_gmt":"2022-04-28T20:46:58","slug":"amerigroup-shareholders-claim","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/amerigroup-shareholders-claim\/","title":{"rendered":"Amerigroup Shareholders Claim Goldman Sachs Advisers\u2019 Had Conflicts of Interest That Influenced $4.5B Sale of Company to WellPoint"},"content":{"rendered":"<p>Amerigroup Corp (AGP) shareholders are suing its board and Goldman Sachs Group (GS) because they say that the defendants\u2019 conflicts of interest got in the way of other bids being considered before they agreed to let WellPoint Inc. (WLP) buy the managed care company for $4.9B.<\/p>\n<p>The shareholders\u2019 securities lawsuit was filed by the Louisiana Municipal Police Employees Retirement System and the City of Monroe Employees Retirement System in Michigan in the Delaware Court of Chancery, which has seen an increase in cases over whether certain deals shouldn\u2019t go through because of questions surrounding whether the advisors involved had conflicts of interest.<\/p>\n<p>According to the plaintiffs, a complex derivative transaction with Amerigroup created a financial incentive for Goldman to execute a deal quickly even if was not in the best interests of shareholders. The financial firm is accused of pushing for the WellPoint purchase instead of one with another company that was willing to pay more albeit bringing more regulatory issues with it that would take time to resolve.<\/p>\n<p>The WellPoint deal, contend the pension funds, allowed for the possibility that Goldman would get a windfall profit on the derivative deal that would obligate Amerigroup to pay the financial firm $233.7M if an agreement on the sale was reached by August 13, as well as another \u201csubstantial\u201d financial figure if by October 22 it was closed.<\/p>\n<p>Now, Amerigroup\u2019s shareholders want to block the sale of the company until the board improves the deal\u2019s terms. They believe that the process that led to the deal, which could nearly double WellPoint\u2019s Medicaid business, prevented the highest price possible from being considered and was \u201cflawed.\u201d They said that the derivative transaction was a conflict for Goldman because Amerigroup would be it much more than the $18.7M it was supposed to get from the WellPoint deal.<\/p>\n<p>Although not defendants in this shareholder complaint, the firm\u2019s management and Barclays (BCS) also had conflicts when arranging the company\u2019s sale, claim the plaintiffs. They said that one could argue that WellPoint bought Amerigroup executives\u2019 loyalty by indicating that they could stay in their positions after the acquisition and that following the merger they would be given $12M worth of WellPoint stock.<\/p>\n<p>Under President Barack Obama\u2019s health-care law, up to 17 million patients would be added under Medicaid. The sale would make WellPoint the largest provider of Medicaid coverage for the impoverished. UnitedHealth Group Inc. (UNH) would be the second largest. More healthcare company acquisitions are expected as competition for the growing Medicaid market continues.<\/p>\n<p><a href=\"https:\/\/www.reuters.com\/article\/amerigroup-lawsuit-idUSL2E8JHBYQ20120817\">Goldman &#8216;conflicted&#8217; in Amerigroup\/WellPoint deal-lawsuit<\/a>, Reuters, August 17, 2012<\/p>\n<p><a href=\"https:\/\/www.ibj.com\/wellpoint-dragged-into-goldman-sachs-suit\/PARAMS\/article\/36206\">WellPoint dragged into Goldman Sachs suit<\/a>, IBJ.com, August 20, 2012<\/p>\n<p><strong>More Blog Posts:<\/strong><\/p>\n<p><a href=\"https:\/\/www.investorlawyers.com\/blog\/2011\/10\/exgoldman_sachs_director_rajat\">Ex-Goldman Sachs Director Rajat Gupta Pleads Not Guilty to Insider Trading Charges<\/a>, Stockbroker Fraud Blog, October 20, 2011<\/p>\n<p><a href=\"https:\/\/www.investorlawyers.com\/blog\/2010\/11\/goldman_sachs_ordered_by_finra_1\">Goldman Sachs Ordered by FINRA to Pay $650K Fine For Not Disclosing that Broker Responsible for CDO ABACUS 2007-ACI Was Target of SEC Investigation<\/a>, Stockbroker Fraud, November 12, 2010<\/p>\n<p> <a href=\"https:\/\/www.investorlawyers.com\/blog\/amerigroup-shareholders-claim\/#more-5354\" class=\"more-link\">Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Amerigroup Corp (AGP) shareholders are suing its board and Goldman Sachs Group (GS) because they say that the defendants\u2019 conflicts of interest got in the way of other bids being considered before they agreed to let WellPoint Inc. (WLP) buy the managed care company for $4.9B. The shareholders\u2019 securities lawsuit was filed by the Louisiana [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3752,3947,4007],"tags":[],"class_list":["post-5354","post","type-post","status-publish","format-standard","hentry","category-financial-firms","category-goldman-sachs","category-shareholder-lawsuits"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Amerigroup Shareholders Claim Goldman Sachs Advisers\u2019 Had Conflicts of Interest That Influenced $4.5B Sale of Company to WellPoint &#8212; Investor Lawyers Blog &#8212; August 21, 2012<\/title>\n<meta name=\"description\" content=\"Amerigroup Corp are suing its board and Goldman Sachs Group because they say that conflicts of interest got in the way of other bids being considered\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/amerigroup-shareholders-claim\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Amerigroup Shareholders Claim Goldman Sachs Advisers\u2019 Had Conflicts of Interest That Influenced $4.5B Sale of Company to WellPoint &#8212; 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