with the Company retaining the other 15%. Under the terms of the TRA, Premier made TRA payments to the Member Owners only as the Company had actual cash tax savings resulting from the Company’s use of the DTAs.
On January 23, 2020, the Board of Directors (the “Board”) of Premier formed a committee of independent directors (the “Special Committee”) to review, consider, evaluate, oversee the development of and, as appropriate, reject or recommend to the Board the Restructuring (defined below) or an alternative renewal framework and any agreements proposed to be entered into in connection therewith. The Special Committee retained Cravath, Swaine & Moore LLP as its legal advisor and Bank of America as its financial advisor.
On August 5, 2020, the Special Committee voted to approve a restructuring (the “Restructuring”) of the Company, which involved, in part, Premier’s termination of the TRA between the Company and Member Owners.
On August 5, 2020, the Board voted to approve the Restructuring.
Premier’s termination of the TRA triggered an “Early Termination Payment” (or “TRA Payout”) under the terms of the TRA. The Restructuring was announced August 11, 2020, including the $473.5 million Early Termination Payment.
By letters dated December 10, 2020, and March 1, 2021, Robbins Geller Rudman & Dowd LLP, on behalf of Plaintiff, demanded inspection of certain books and records to investigate suspected wrongdoing in connection with, among other things, the Restructuring and Premier’s Up-C corporate structure. Premier produced to Plaintiff 221 documents (spanning more than 16,000 pages) in response to the demands.
On March 4, 2022, Plaintiff filed the Verified Stockholder Derivative Complaint (the “Complaint”), derivatively on behalf of nominal defendant Premier, against the Defendants in the Action.
The Complaint alleged, among other things, that the TRA Payout was unfair to Premier, was approved for self-interested reasons, and constituted “waste,” and that the Defendants provided false, misleading, and incomplete information to the Class A stockholders.
On May 26, 2023, the Defendants and Nominal Defendant Premier filed Answers to the Complaint. Defendants denied any wrongdoing; Defendants’ Answers asserted that their decisions were “protected by the business judgment rule” and, even if the standard of review were ultimately to be entire fairness, “the
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