The lawyer firm Kessler Topaz Meltzer and the law firm of Kessler Topaz Meltzer & LLP the MultiPlan Corporation (NYSE: MPLN; MPLN.WS) (“MultiPlan”) f/k/a Churchill Capital Corp. III (“Churchill III”) investors that Company brought a class-action lawsuit on behalf of (1) individuals who bought or purchased MultiPlan Securities from July 12 10, 2020 through November 10, 2020, inclusive (the “Class period”) as well as (2) every owner of Churchill III Class A common stock that is entitled to vote on Churchill III's Merger and acquisition by Polaris Parent Corp. and its consolidated subsidiaries, which was completed on October 10, 2020 (the “Merger”).
Deadline Notification: Investors who purchased or obtained MultiPlan Securities during the class period can, by April 26, 2021, request to be named as the representative of the lead plaintiff in the class. To find out more information, or to find out how you can take part in this lawsuit, you can call Kessler Topaz Meltzer & Check LLC: James Maro, Esq. (484) 270-1453 or Adrienne Bell, Esq. (484) 270-1435; toll-free at (844) 887-9500; via e-mail at [email protected]; or click https://www.ktmc.com/multiplan-corp-securities-class-action-lawsuit?utm_source=PR&utm_medium=link&utm_campaign=multiplan.
Churchill III was formed in October of 2019 as a specific purpose vehicle for acquisitions. On February 14 in 2020, Churchill III completed its initial public offering by selling 110 million ownership units to potential investors in exchange for gross revenues of $1.1 billion (the “IPO”). According to the IPO prospectus, Churchill III was required to acquire a target company with an overall worth of 80 percent or more of the assets in trust using the IPO proceeds and complete the acquisition within two years from the IPO.
The Class Period begins July 12, 2020, when Churchill III and MultiPlan, the specialist in healthcare costs, jointly issued a press release to announce their agreement to merge. The Merger was initially valued at $5.7 billion, will be funded through IPO proceeds, as well as billions of dollars of new equity and debt issues.
On September 18, 20th, Churchill III released the proxy document supporting the Merger that urged shareholders to support the Merger (the “Proxy”). The Proxy declared Company believed that Churchill recognized MultiPlan as a possible acquisition target shortly after the IPO. Based on the Proxy and on October 7 October 7 October 7, 2020, shareholders voted to accept the Merger in a special shareholder meeting. In the wake of the Proxy, shareholders were deprived of having the opportunity to fully inform themselves of redeeming their shares in the manner they had the right to do. The claims that were subject to redemption are valued under the Proxy at about $10 per share.
On November 11 November 11 November 11, 2020, just one month following the completion of the Merger, Muddy Waters published an article on Churchill III, titled “MultiPlan — Private Equity Necrophilia is a part of the Great 2020 Money Grab” It was based on numerous non-public sources, including discussions with the former MultiPlan executives as well as other experts in the industry, and also on the Company's analysis. The report revealed in particular that (1) MultiPlan was in the process of losing its biggest customer, UnitedHealthcare, which was estimated to cost Churchill III up to 35 percent of its revenue and 80 percent of its leveraged free cash flow in two years. (2) MultiPlan was in substantial financial decline due to its flawed business model that made money from the excessively high cost for healthcare; (3) UnitedHealthcare had purportedly launched Naviguard, a rival to Naviguard, to decrease its involvement with MultiPlan and to integrate the costly and unreliable services provided by MultiPlan inside the Company as well as (4) MultiPlan had suffered from significant, unidentified price pressures that caused it to reduce it's “take price” it charged its customers at times by half and falsely classified revenue declines as “idiosyncratic” however they were caused by persistent negative trends in pricing that afflicted MultiPlan's business.
After this announcement that followed, the value of Churchill III's securities plummeted. On November 12, 2020, Churchill III's class standard stock cost dropped to a record low of $6.12 per share. This is more than 40% lower than the price at which shareholders could have exchanged their shares before the date of the vote of shareholders regarding the Merger.
The complaint states that the Proxy did not disclose, among other things: (a) MultiPlan was losing tens of millions of dollars in revenues and sales to Naviguard, which could threaten as high as 35 percent of Churchill III's revenue and 80percent of its cash flows that it levered in 2022; (b) the revenue and sales decreases in the three quarters preceding the Merger did not result from “idiosyncratic” customer behavior as depicted, but because of a significant decline in the demand for MultiPlan's services and the increase in competition. (c) MultiPlan faced significant price pressures for its services and was required to significantly cut its take rate in the weeks leading to the Merger by insurance companies. (d) because of this, MultiPlan was set to continue to be afflicted by revenue and earnings declines, heightened competition, and worsening pricing dynamics after the Merger as well as (e) due to the impact of the above, Churchill III investors had significantly overpaid for the purchase of MultiPlan during the Merger. Multiplan's business had a value far less than what it was portrayed to investors.
MultiPlaninvestors can, no after April 26, 2021, be eligible to be appointed as the lead plaintiff representative for the class by Kessler Topaz Meltzer &Check, LLP or other counsel or counselor be silent remain a class member. The term “lead plaintiff” refers to a party representative that acts on behalf of all class members when controlling the course of litigation. To be appointed as a leading plaintiff, the Court must find that the class member's claim is similar to other members of the class. In addition, the plaintiff can serve as a representative of the entire class. The ability to share any settlement will not be affected by your choice of whether or not you want to be a lead plaintiff.
Kessler Topaz Meltzer & Check, LLP prosecutes class actions in federal and state courts across the country that deal with securities fraud, breach of fiduciary duty in addition to other violations of federal and state law. Kessler Topaz Meltzer & Check, LLP is a driving firm behind reforms to corporate governance. It has successfully recovered billions for investors, individuals, and institutions from all over the United States and worldwide. The firm represents consumers, investors, and whistleblowers (private citizens who expose fraud against the government and contribute to the recovery of federal dollars). The lawsuit, in this case, was not initiated through Kessler Topaz Meltzer & Check LLP. For more details about Kessler Topaz Meltzer & Check, LLP, please visit www.ktmc.com.
Kessler Topaz Meltzer & Check, LLP
James Maro, Jr., Esq.
Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
(844) 887-9500 (toll free)
SOURCE Kessler Topaz Meltzer & Check, LLP