Envision Merger Settlement

You or someone in your family may have purchased, sold, or held Envision common stock during the time period from and including August 10, 2018, and through and including October 11, 2018 (“Settlement Class Period”).

The Court directed that this Notice be sent to Settlement Class Members because they have a right to know about the proposed Settlement of this class action lawsuit, and about all of their options, before the Court decides whether to approve the Settlement.

This Notice explains the class action lawsuit, the Settlement, Class Members’ legal rights, what benefits are available, who is eligible for them, and how to get them.

The Court in charge of the Litigation is the United States District Court for the District of Delaware, and the case is known as In Re Envision Healthcare Corp., Civil No. 18-cv-01068-RGA. The case has been assigned to the Honorable Richard G. Andrews. Jon Barrett has been appointed by the Court as lead plaintiff (referred to as “Lead Plaintiff” in this Notice), and the parties who were sued and who have now settled are called the “Defendants.”

On June 11, 2018, Envision issued a press release announcing that Enterprise Parent Holdings Inc. had agreed to acquire Envision for $46.00 per share in cash (the “Acquisition”). On July 9, 2018, Envision filed with the U.S. Securities and Exchange Commission (the “SEC”) a Preliminary Proxy Statement on Schedule 14A. On August 13, 2018, Envision filed with the SEC a Definitive Proxy Statement on Schedule 14A (the “Proxy”). On September 6, 2018, Envision issued supplemental disclosures to the Proxy. On September 11, 2018, Envision shareholders voted to approve the Acquisition and the Acquisition closed on October 11, 2018.

Lead Plaintiff filed this action on August 9, 2018. On October 29, 2018, Lead Plaintiff moved for consolidation of White v. Envision Healthcare Corporation, et al., Case No. 1:18-cv-01068, filed in the District of Delaware, and Barrett v. Envision Healthcare Corporation, et. al., Case No. 1:18-cv-01219, filed in the District of Delaware. Jon Barrett further sought appointment as lead plaintiff pursuant to the Private Securities Litigation Reform Act of 1995 (“PSLRA”), 15 U.S.C. § 78u-4(a)(3)(B), and sought approval of his selection of Monteverde & Associates, PC as Lead Counsel and Cooch and Taylor, P.A. as Liaison Counsel. On November 5, 2018, the Court granted Lead Plaintiff Jon Barrett’s motion for consolidation, appointment as lead plaintiff, and approval of selection of lead counsel.

On December 13, 2018, Lead Plaintiff filed an Amended Class Action Complaint for Violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 (the “Amended Complaint”). Defendants filed a Motion to Dismiss on February 11, 2019 (the “Motion to Dismiss”). The Court referred the Motion to Dismiss to Magistrate Judge Sherry R. Fallon, who heard argument on July 29, 2019. On August 1, 2019, Magistrate Judge Fallon issued a Report and Recommendation denying the Motion to Dismiss. Defendants filed Objections to Magistrate Judge Fallon’s Report and Recommendation on August 15, 2019, and Lead Plaintiff filed his response on September 16, 2019. On September 19, 2019, the Court overruled the Defendants’ Objections and adopted the Report and Recommendation. Defendants answered the Amended Complaint on November 7, 2019.

On November 26, 2019, the Court held a scheduling conference and entered a scheduling order on December 4, 2019, setting a schedule for the case with a jury trial to begin on October 4, 2021.

On December 3, 2019, Lead Plaintiff propounded discovery requests to the Defendants and Defendants propounded discovery requests to Lead Plaintiff on December 13, 2019.

On January 28, 2020, Lead Plaintiff issued discovery subpoenas to financial advisors involved in the Acquisition.

On January 15, 2020, Lead Plaintiff produced his documents. Between January 15, 2020 and May 29, 2020, Defendants produced 184,035 pages of documents. The financial advisors produced more than 450,000 pages of documents.

On February 28, 2020, Lead Plaintiff made an offer to settle the Action. Arm’s length negotiations took place over the next five months.

On April 13, 2020, Lead Plaintiff moved for Class Certification.

On May 7, 2020, the Court entered an amended scheduling order for the case.

On July 27, 2020, the Parties mediated the Action before Michelle Yoshida of Phillips ADR and reached agreement on the material terms of a settlement. On July 30, 2020, Lead Plaintiff filed a “Notice of Settlement” with the Court, stating that “the parties have reached a settlement in principle in the Action.”

Each of the Defendants have denied and continue to deny any wrongdoing by or liability against them arising out of any of the conduct, statements, acts, or omissions alleged, or that could have been alleged, in the Litigation. Defendants expressly deny that Lead Plaintiff has asserted any valid claims as to any of them, and expressly deny any and all allegations of fault, liability, wrongdoing, or damages whatsoever and maintain that their conduct was at all times proper and in compliance with all applicable provisions of law. In addition, Defendants maintain that they have meritorious defenses to all claims alleged in the Litigation.

In a class action, one or more people called a "plaintiff" sues on behalf of people who have similar claims. All of the people with similar claims are referred to as a "class" or "class members". One court resolves the issues for all class members, except for those class members who exclude themselves from the class.

The Court has not decided in favor of the Defendants or the Settlement Class. Instead, both sides agreed to the Settlement to avoid the costs and risks of further litigation, including trial and post-trial appeals. Lead Plaintiff agreed to the Settlement because Lead Plaintiff (advised by Lead Counsel) considered the Settlement amount to be a favorable recovery compared to the risk-adjusted possibility of recovery after trial and any appeals, in light of Defendants’ legal argument that the statements at issue were not actionable at all by the Settlement Class, and its factual arguments that Defendants believed the Company was complying with all applicable laws, and that the Settlement Class had not sustained any damages. Lead Plaintiff and Lead Counsel believe the Settlement is in the best interest of all Settlement Class Members in light of the real possibility that continued litigation could result in no recovery at all.

The Court directed that everyone who fits this description is a Settlement Class Member: all record holders and all beneficial holders of Envision common stock who purchased, sold, or held such stock during the period from and including August 10, 2018, the record date for the Acquisition, through and including October 11, 2018, the date the Acquisition closed, including any and all of their respective predecessors, successors, trustees, executors, administrators, estates, legal representatives, heirs, assigns, and transferees. Under the Plan of Allocation proposed by Plaintiff’s Counsel and described below, only Settlement Class Members who were holders of record of Envision common stock at the close of business on August 10, 2018, and were thus holders of record entitled to vote on the Merger, and who submit a valid Proof of Claim to the Claims Administrator, may share in the recovery. Certain persons are excluded from the Settlement Class, as described below.

Excluded from the Settlement Class are (i) Defendants; (ii) members of the immediate families of each Defendant; (iii) Envision’s subsidiaries and affiliates; (iv) any entity in which any Defendant has a controlling interest; (v) the legal representatives, heirs, successors, administrators, executors, and assigns of each Defendant; and (vi) any Persons or entities who properly exclude themselves by filing a valid and timely request for exclusion.

If you are still not sure whether you are included, you can ask for free help. You can contact the Claims Administrator toll-free at 1-888-905-0951 or view additional contact information here, or you can fill out and return the Proof of Claim enclosed with this Notice package, to see if you qualify.

In exchange for the Settlement and the release of the Released Claims (defined below) as well as dismissal of the Litigation, Defendants have agreed that a payment of $17.4 million will be made by Defendants (or on their behalf) to be distributed, after taxes, fees, and expenses, among all Authorized Claimants.

Pursuant to the Settlement described herein, the Settlement Amount is $17,400,000. Under the Plan of Allocation proposed by Plaintiff’s Counsel, only Settlement Class Members who were holders of record of Envision common stock at the close of business on August 10, 2018, and were thus holders of record entitled to vote on the Merger, and who submit a valid Proof of Claim to the Claims Administrator, may share in the recovery, pro rata with their stock holdings (the proposed “Plan of Allocation”). Your actual recovery will be a proportion of the Net Settlement Fund determined by your claim as compared to the total claims of all eligible Settlement Class Members who submit acceptable Proofs of Claim. You may receive more or less than the estimated average amount provided below depending on the number of claims submitted. Lead Plaintiff estimates that approximately 120 million shares of Envision common stock are in the Settlement Class. Assuming 100% of the shares in the Settlement Class submit a valid Proof of Claim, the average distribution will be approximately $0.14 per share, before payment of expenses of notice and administration of the Settlement, Taxes and Tax Expenses, and such attorneys’ fees and expenses (including time and expenses awarded by the Court to Lead Plaintiff) described in FAQ 17 (estimated to be less than $0.05 per share), and interest as may be awarded by the Court (the “Net Settlement Fund”). Historically, less than all eligible investors submit claims, resulting in higher average distributions per share.

The Net Settlement Fund will be distributed to Settlement Class Members who submit valid, timely Proof of Claim forms (“Claimants”) on a pro rata basis. However, no distributions will be made to Claimants who would otherwise receive a distribution of less than $10.00.

Defendants expressly deny that any damages were suffered by Lead Plaintiff or the Settlement Class.

Payments shall be conclusive against all Claimants. No Person shall have any claim against Plaintiff’s Counsel, Lead Counsel, Lead Plaintiff, the Claims Administrator, Defendants and Defendants’ Released Persons, or any Person designated by Lead Counsel based on distributions made substantially in accordance with the Stipulation and the Settlement contained therein, or further order(s) of the Court. No Settlement Class Member shall have any claim against Defendants for any Released Claims. All Settlement Class Members who fail to complete and file a valid and timely Proof of Claim shall be barred from participating in distributions from the Net Settlement Fund (unless otherwise ordered by the Court), but otherwise shall be bound by all of the terms of the Stipulation, including the terms of any judgment entered and the releases given.

To qualify for a payment, you must submit a Proof of Claim. A Proof of Claim is enclosed with the Notice or it may be downloaded here. Read the instructions carefully, fill out the Proof of Claim, include all the documents the form asks for, sign it, and return it so that it is postmarked, if mailed, or received, if submitted online, no later than March 11, 2021. Pursuant to its directions, The Proof of Claim may also be submitted online here.

The Court will hold a Final Approval Hearing on February 16, 2021, to decide whether to approve the Settlement. Settlement Class Members should check the Settlement Class website in advance of the Final Approval Hearing to determine whether that hearing will occur in person or via a remote link. If the Court approves the Settlement, there might be appeals. It is always uncertain whether these appeals can be resolved, and resolving them can take time, perhaps more than a year. It also takes time for all the Proofs of Claim to be processed. Please be patient.

Unless you timely and validly exclude yourself, you are staying in the Settlement Class, and that means that you cannot sue, continue to sue, or be part of any other lawsuit against Defendants’ Released Persons about the Released Claims in this case. It also means that all of the Court’s orders will apply to you and legally bind you, and you will release your claims in this case against Defendants’ Released Persons. The terms of the release are included in the enclosed Proof of Claim form and are also set forth below:

• “Plaintiff’s Released Claims” means any and all claims, rights, and causes of action, duties, obligations, demands, actions, debts, sums of money, suits, contracts, agreements, promises, damages, and liabilities, whether known or unknown, contingent or non-contingent, or suspected or unsuspected, including all claims arising under federal or state statutory or common law or any other law, rule, or regulation, whether foreign or domestic, that arise out of or relate in any way to the institution, prosecution, or settlement of the claims against the Defendants, except for claims relating to the enforcement of this Settlement.
• “Released Claims” means any and all claims, rights, and causes of action, duties, obligations, demands, actions, debts, sums of money, suits, contracts, agreements, promises, damages, and liabilities, whether known or unknown, contingent or non-contingent, derivative or direct, or suspected or unsuspected, including any claims arising under federal or state statutory or common law or any other law, rule, or regulation, whether foreign or domestic, that have been asserted, could have been asserted, or could be asserted in the future against defendant Envision, the Individual Defendants (consisting of William A. Sanger, Christopher A. Holden, James D. Shelton, Michael L. Smith, Leonard M. Riggs, Carol J. Burt, Cynthia S. Miller, Kevin P. Lavender, Joey A. Jacobs, Steven I. Geringer, John T. Gawaluck, and James A. Deal) (all defendants referenced above are collectively referred to herein as “Defendants”), Enterprise Parent Holdings Inc., Enterprise Merger Sub Inc., and Kohlberg Kravis Roberts & Co. L.P., and any and all of their related parties, including, without limitation, any and all of their current or former parents, subsidiaries, predecessors, successors, divisions, investment funds, joint ventures, and general or limited partnerships, and each their respective current or former officers, directors, trustees, partners, members, contractors, auditors, principals, agents, managing agents, employees, attorneys, accountants, investment bankers, underwriters, insurers in their capacities as such, as well as each of the Individual Defendants’ immediate family members, heirs, executors, personal or legal representatives, estates, beneficiaries, predecessors, successors, and assigns (collectively, “Defendants’ Released Persons”), that arise out of or relate in any way to (i) the Action, including the claims in the Action and any acts, facts, events, disclosures, or omissions alleged or referenced therein; (ii) any duties, fiduciary or otherwise, of Defendants’ Released Persons arising from or related to the Acquisition; (iii) the common stock of Envision arising from or related to the Acquisition; or (iv) any other claims concerning the Acquisition. Notwithstanding the aforementioned, the following claims are explicitly excluded: all claims (1) currently asserted in the litigation captioned In re Envision Healthcare Corporation Securities Litigation, No. 3:17-cv-01112 (M.D. Tenn.); (2) related to the enforcement of this Settlement; and (3) between Defendants’ Released Persons and their respective insurers.
• “Unknown Claims” means (i) any of the Plaintiff’s Released Claims which Lead Plaintiff or any Settlement Class Member, or any of their agents or attorneys, does not know or suspect to exist in such Person’s favor at the time of the release of the Plaintiff’s Released Claims, and (ii) any of the Released Claims that the Defendants’ Released Persons do not know or suspect to exist in his, her, or its favor at the time of the release of the Released Claims, which, in the case of both (i) and (ii), if known by such Person, might have affected such Person’s decision with respect to this Settlement, including, without limitation, such Person’s decision not to object to this Settlement or not to exclude himself, herself, or itself from the Settlement Class. Unknown Claims include those Plaintiff’s Released Claims and Released Claims in which some or all of the facts comprising the claim may be suspected, or even undisclosed or hidden. With respect to any and all Plaintiff’s Released Claims and Released Claims, upon the Effective Date, Lead Plaintiff and Defendants shall expressly, and each of the Settlement Class Members and Defendants’ Released Persons shall be deemed to have, and by operation of the Order and Final Judgment shall have, expressly waived to the fullest extent permitted by law, the provisions, rights, and benefits of California Civil Code § 1542, which provides:
  • A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release, and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.
• Lead Plaintiff and Defendants shall expressly, and each of the Settlement Class Members and Defendants’ Released Persons shall be deemed to have, and by operation of the Order and Final Judgment, shall have expressly waived any and all provisions, rights, and benefits conferred by any law of any state or territory of the United States, or principle of common law, which is similar, comparable or equivalent to California Civil Code § 1542. Lead Plaintiff, Settlement Class Members, and the Defendants’ Released Persons may hereafter discover facts in addition to or different from those which such party now knows or believes to be true with respect to the subject matter of Plaintiff’s Released Claims and the Released Claims, but Lead Plaintiff and Defendants shall expressly, and each Settlement Class Member and Defendants’ Released Persons, upon the Effective Date, shall be deemed to have, and by operation of the Order and Final Judgment shall have fully, finally, and forever settled and released any and all Plaintiff’s Released Claims or Released Claims, as the case may be, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed, upon any theory of law or equity now existing or coming into existence in the future, including, but not limited to, conduct that is negligent, reckless, intentional, with or without malice, or a breach of any duty, law, or rule, without regard to the subsequent discovery or existence of such different or additional facts, whether or not previously or currently asserted in any action. Lead Plaintiff and Defendants acknowledge, and the Settlement Class Members and Defendants’ Released Persons, shall be deemed by operation of the Order and Final Judgment to have acknowledged, that the foregoing waiver was separately bargained for and a key element of the Settlement of which this release is a part.

You can maintain your own lawsuit only if you exclude yourself from the Settlement.

To exclude yourself from the Settlement, you must send a letter by mail saying that you want to be excluded from the Settlement Class in In Re Envision Healthcare Corp., Civil No. 18-cv-01068-RGA. You must provide the following information: (a) name; (b) address; (c) telephone number; (d) amount of Envision common stock held during the period from and including August 10, 2018, through and including October 11, 2018; and (e) a statement that you wish to be excluded from the Settlement Class. You must mail or email your exclusion request postmarked no later than January 25, 2021, to:

Envision Healthcare Corp. Merger Litigation
c/o EPIQ
P.O. Box 4717
Portland, OR 97208-4717
claims@EnvisionMergerSettlement.com

You cannot exclude yourself on the phone or this website. If you ask to be excluded, you will not receive any settlement payment, and you cannot object to the Settlement. You will not be legally bound by anything that happens in this Litigation.

No. Unless you exclude yourself, you give up any rights to sue the Defendants and the other Defendants’ Released Persons for any and all Released Claims. If you have a pending lawsuit against the Defendants’ Released Persons regarding any Released Claims, speak to your lawyer in that case immediately. You must exclude yourself from this Litigation to continue your own lawsuit. Remember, the exclusion deadline is January 25, 2021.

No. If you exclude yourself, you may not send in a Proof of Claim to ask for any money.

Yes. The Court appointed Monteverde & Associates PC to lead the litigation, which the Lead Plaintiff brought on behalf of himself and all other Settlement Class Members. These lawyers are called Lead Counsel. You will not be charged directly for these lawyers. If you want to be represented by your own lawyer, you may hire one at your own expense.

In the three years that this Action has been pending, Lead Counsel have not been paid for their services on behalf of Lead Plaintiff and the Settlement Class, nor for their substantial expenses. The fee requested is to compensate Lead Counsel for their work investigating the facts, litigating the case over the past three years, and negotiating the Settlement.

Lead Counsel will request the Court to award attorneys’ fees not to exceed one-third of the Settlement Amount, plus expenses not to exceed $60,000 in connection with the Litigation, plus interest on such fees and expenses at the same rate as earned by the Settlement Fund. Such sums as may be approved by the Court will be paid from the Settlement Fund.

If you are a Settlement Class Member, you can write to the Court to object to the proposed Settlement, the proposed Plan of Allocation, Lead Counsel’s fee and expense application, and/or Lead Plaintiff’s time and expense request. The Court will consider your views. To object, you must send a signed letter saying that you object to the proposed Settlement, the proposed Plan of Allocation, the application for fees and expenses, or Lead Plaintiff’s time and expense request in the Envision Securities Litigation, and the reasons you object. You must include your name, address, telephone number, and your signature. You must identify the date(s), price(s), and number(s) of shares of Envision common stock you held, purchased, acquired, or sold during the Settlement Class Period, and state the reasons why you object. You must also include copies of documents demonstrating such holding(s), purchase(s), acquisition(s), and/or sale(s). Your objection must be mailed or delieved, and emailed to each of the following addresses such that it is received no later than January 25, 2021 and filed with the Clerk of the Court no later than February 9, 2021:

Objecting is simply telling the Court that you do not like something about the proposed Settlement, the Plan of Allocation, the award of fees and expenses to Lead Counsel, or any award to Lead Plaintiff. You can object only if you stay in the Settlement Class. Excluding yourself is telling the Court that you do not want to be part of the Settlement Class.

The Court will hold a Final Approval Hearing at 10:00 a.m. on February 16, 2021. Settlement Class Members should check the Settlement Class website in advance of the Final Approval Hearing to determine whether that hearing will occur in person at the United States District Court for the District of Delaware, J. Caleb Boggs Federal Building, 844 N King Street, Wilmington, DE 19801 or via a remote link. At the hearing the Court will consider whether the Settlement and proposed Plan of Allocation are fair, reasonable, and adequate, the final certification of the Settlement Class, Lead Plaintiff, and Lead Counsel, and whether the award of fees and expenses to Lead Counsel, or any award to Lead Plaintiff should be granted. If there are objections, the Court will consider them. The Court will listen to people who have asked to speak at the hearing. After the Final Approval Hearing, the Court will decide whether to approve the Settlement, the Plan of Allocation, the award of fees and expenses to Lead Counsel, and any award to Lead Plaintiff. We do not know how long these decisions will take. The Court may change the date and time of the Final Approval Hearing without another notice being sent to Settlement Members. If you want to attend the hearing, you may wish to check with Lead Counsel or the Settlement website beforehand to be sure that the date and/or time has not changed.

No. Lead Counsel will answer questions the Court may have. But, you are welcome to come at your own expense. If you send an objection or statement in support of the Settlement, you are not required to come to court to discuss it. As long as you mailed your objection on time, the Court will consider it. You may also pay your own lawyer to attend, but you are not required to do so. Settlement Class Members do not need to appear at the hearing or take any other action to indicate their approval.

If you object to the Settlement, the Plan of Allocation, the award of fees and expenses to Lead Counsel, or any award to Lead Plaintiff, you may ask the Court for permission to speak at the Final Approval Hearing. To do so, you must include with your objection (see FAQ 18) a statement saying that it is your “Notice of Intention to Appear in the Envision Securities Litigation.” Persons who intend to object to the Settlement, the Plan of Allocation, and/or any attorneys’ fees and expenses to be awarded to Lead Counsel (including any award to Lead Plaintiff for his representation of the Settlement Class) and desire to present evidence at the Final Approval Hearing must include in their written objections the identity of any witnesses they may call to testify and exhibits they intend to introduce into evidence at the Final Approval Hearing.

You cannot speak at the hearing if you exclude yourself.

If you do nothing, you will get no money from this Settlement. But, unless you exclude yourself, you will not be able to start a lawsuit or be part of any other lawsuit against the Defendants or any other Defendants’ Released Persons about the issues raised in this case ever again.

The Notice summarizes the proposed Settlement. More details are in the Stipulation of Settlement dated October 15, 2020 (the “Stipulation”). You can obtain answers to common questions regarding the proposed Settlement by contacting the Claims Administrator toll-free at 1-888-905-0951. A copy of the Stipulation and other relevant documents are also available on the Important Documents page.

For more information, you can visit the Important Documents page or call toll-free 1-888-905-0951. You can also contact the attorneys for Lead Plaintiff, listed in FAQ 18.

As stated above, the Settlement Amount is $17,400,000. Under the Plan of Allocation proposed by Plaintiff’s Counsel, only Settlement Class Members who were holders of record of Envision common stock at the close of business on August 10, 2018, and were thus holders of record entitled to vote on the Merger, and who submit a valid Proof of Claim to the Claims Administrator, may share in the recovery, pro rata with their stock holdings (the proposed “Plan of Allocation”). Your actual recovery will be a proportion of the Net Settlement Fund determined by your claim as compared to the total claims of all eligible Settlement Class Members who submit acceptable Proofs of Claim. You may receive more or less than the estimated average amount provided below depending on the number of claims submitted. The Court may approve this proposed Plan of Allocation, or modify it, without additional notice to the Class. Any order modifying the Plan of Allocation will be posted on this Settlement website.

At the record date for the Merger, August 10, 2018, 121,391,673 shares of Envision common stock were outstanding and entitled to vote. Directors and officers of Envision owned 1,177,250 of those shares, leaving the Settlement Class with 120,214,423 shares at the time of the Merger. Assuming that all of the shares outstanding at the time of the Merger participate in this Settlement, Lead Plaintiff’s counsel estimates that the average distribution will be approximately $0.14 per share of Envision common stock before the deduction of Court-approved fees and expenses, as described in FAQ 17 (estimated to be less than $0.05 per share), and the cost of notice and claims administration. Historically, less than all eligible investors submit claims, resulting in higher average distributions per share. The Net Settlement Fund will be distributed to Settlement Class Members who submit valid, timely Proof of Claim forms (“Claimants”) on a pro rata basis. However, no distributions will be made to Claimants who would otherwise receive a distribution of less than $10.00.

Payments shall be conclusive against all Authorized Claimants. No Person shall have any claim against Lead Counsel, Lead Plaintiff, the Claims Administrator, Defendants’ Released Persons, or any Person designated by Lead Counsel based on distributions made substantially in accordance with the Stipulation and the Settlement contained therein, or further order(s) of the Court. No Settlement Class Member shall have any claim against Defendants’ Released Persons for any Released Claims. All Settlement Class Members who fail to complete and submit a valid and timely Proof of Claim shall be barred from participating in distributions from the Net Settlement Fund (unless otherwise ordered by the Court), but otherwise shall be bound by all of the terms of the Stipulation, including the terms of any judgment entered and the releases given.