| COMPANY |
GoHealth, Inc. |
| COURT |
United States District Court for the Northern District of Illinois |
| CASE NUMBER |
20-cv-05593 |
| JUDGE |
The Honorable Jeremy C. Daniel |
| CLASS PERIOD |
Pursuant to July 2020 IPO |
| SECURITY TYPE |
Class A Common Stock |
Case Background:
According to the complaint, GoHealth provides an end-to-end health insurance marketplace that specializes in matching consumers with Medicare Advantage plans. GoHealth is organized as a holding company, with GoHealth Holdings, LLC (“GHH”) as its principal asset, which houses its operations. GHH was formerly known as Blizzard Parent, LLC, until it was acquired by the private equity firm Centerbridge Partners, L.P. and its affiliated entities (“Centerbridge”) in September 2019 for $1.1 billion in equity and cash (the “Acquisition”). In connection with the Acquisition, Centerbridge also agreed to pay GoHealth’s selling shareholders up to $275 million worth of additional contingent consideration, to be paid in the form of common and senior preferred earnout units, if GoHealth achieved certain earnings targets in late 2019 and 2020.
The complaint alleges that statements in the Registration Statement were materially false and misleading when made because they failed to disclose the following adverse facts that existed prior to and at the time of the IPO: (1) the Medicare insurance industry had undergone a period of elevated churn in the first half of 2020 as a result of increased competition, the growth of direct-to-consumer insurance brokers and the occurrence of a special enrollment period; (2) GoHealth suffered from a higher risk of customer churn as a result of its unique business model and limited carrier base; (3) GoHealth suffered from degradations in customer persistency and retention as a result of elevated industry churn, vulnerabilities that arose from GoHealth’s concentrated carrier business model, and GoHealth’s efforts to expand into new geographies, develop new carrier partnerships and worsening product mix; (4) GoHealth had entered into agreements with its external sales agents that provided for a materially worse revenue sharing percentage as compared to historical arrangements (i.e., a 90% level in 2020 versus a relatively low level in 2019), which had substantially decreased the profits that could be generated in GoHealth’s Medicare External segment; and (5) these adverse financial and operational trends were internally projected by GoHealth to continue and worsen following the IPO.
Current Status of Case:
On February 27, 2024, the Court issued an Order granting Preliminary Approval of Settlement and scheduled a Final Settlement Hearing for May 22, 2024. This action is ongoing.
The deadline to file a claim is June 12, 2024. If you have any questions or need further information about this settlement, you may go to the following website, www.gohealthsecuritieslitigation.com, or you can contact the claims administrator, A.B. Data, Ltd. at 1-877-388-1720.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP: Jon Naji, Esq. (484) 270-1453; or via e-mail at info@ktmc.com. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.