Healthcare Services Group, Inc. Announces Settlement of Shareholder Derivative Lawsuits

Healthcare Services Group, Inc. (NASDAQ:HCSG) (the “Company”) has agreed to settle (the “Settlement”) the shareholder derivative actions entitled McCollum v. Wahl, et al., No. 2:20-cv-03426 (E.D. Pa.) and Batan, et al. v. Wahl, et al., No. 2:21-cv-02810 (E.D. Pa.), which had been pending in the United States District Court for the Eastern District of Pennsylvania (the “Federal Court”), and Reisman, et al. v. Wahl, et al., No. 2021-03255 and Berezin, et al. v. Wahl, et al., No. 2021-03366, which had been pending in the Court of Common Pleas of Bucks County, Pennsylvania against the Company, as a nominal defendant, and certain of the Company’s current and former directors and executive officers. Pursuant to the Settlement, and without any admission of fault or wrongdoing by the defendants, the Company will agree to continue and/or adopt certain corporate governance practices and to pay $1 million for plaintiffs’ counsel fees and expenses, which amount will be paid by the Company’s insurance policy. The Settlement remains subject to court approval. The Federal Court has granted preliminary approval of the proposed Settlement. A copy of the Notice of Proposed Derivative Settlement is included below.

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA

 

IN RE HEALTHCARE SERVICES GROUP, INC. DERIVATIVE LITIGATION

 

 

 

Case No. 2:20-cv-03426-KSM

 

NOTICE OF PROPOSED DERIVATIVE SETTLEMENT

NOTICE TO CURRENT HEALTHCARE SERVICES GROUP, INC. (“HCSG”), STOCKHOLDERS

PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR RIGHTS MAY BE AFFECTED. THIS NOTICE RELATES TO A PROPOSED SETTLEMENT AND DISMISSAL OF SHAREHOLDER DERIVATIVE LITIGATION AND CONTAINS IMPORTANT INFORMATION REGARDING YOUR RIGHTS. YOUR RIGHTS MAY BE AFFECTED BY LEGAL PROCEEDINGS IN THIS ACTION.

IF THE COURT APPROVES THE SETTLEMENT AND DISMISSAL OF THE ACTION, SHAREHOLDERS OF HCSG WILL BE FOREVER BARRED FROM CONTESTING THE APPROVAL OF THE PROPOSED SETTLEMENT AND FROM PURSUING THE SETTLED CLAIMS. THIS ACTION IS NOT A “CLASS ACTION.” THUS, THERE IS NO COMMON FUND UPON WHICH YOU CAN MAKE A CLAIM FOR A MONETARY PAYMENT.

THE COURT HAS MADE NO FINDINGS OR DETERMINATIONS RESPECTING THE MERITS OF THE ACTION. THE RECITATION OF THE BACKGROUND AND CIRCUMSTANCES OF THE SETTLEMENT CONTAINED HEREIN DOES NOT CONSTITUTE THE FINDINGS OF THE COURT. IT IS BASED ON REPRESENTATIONS MADE TO THE COURT BY COUNSEL FOR THE PARTIES.