In re Adeptus Health Securities Litigation

Court: United States District Court of the Eastern District of Texas
Case Number: No. 4:17-CV-0449-ALM
Judge: Hon. Amos L. Mazzant, III
Class Period: 06/25/2014 - 03/01/2017
Case Contacts: Jeremy P. Robinson, Abe Alexander

This is a securities fraud class action on behalf of a class of persons and entities who purchased or acquired the securities of Adeptus Health Inc. (“Adeptus” or the “Company”) from June 25, 2014 through March 1, 2017, inclusive (the "Class Period"), including purchasers of Adeptus common stock in the Company’s public offerings. On August 31, 2017, the Honorable Amos Mazzant appointed the Arkansas Teacher Retirement System as co-Lead Plaintiff and BLB&G as co-Lead Counsel for the Class.

The Court hearing on the fairness of the Settlement and related matters which is scheduled for May 20, 2020, at 11:30 a.m. Central time will be conducted by telephone.

Settlement Class Members who wish to participate in the hearing may do so by dialing 1-888-748-9073 (toll-free, within the U.S.) or 1 408-419-1715 (anywhere) and using Meeting ID 902 723 193.

If you plan to participate in the hearing, please email Lead Counsel at and in advance of the hearing. Please dial in to the number provided above at least 15 minutes before the hearing is scheduled to begin (i.e., at 11:15 a.m. Central time).

In addition, if you have submitted or do submit an objection to the Settlement, Plan of Allocation or motion for attorneys’ fees and expenses, please send a copy of that objection to Lead Counsel at and


Plaintiffs Have Reached a Proposed Settlement for $44 Million

Lead Plaintiffs Alameda County Employees’ Retirement Association and Arkansas Teacher Retirement System and additional named plaintiff Miami Fire Fighters’ Relief and Pension Fund (collectively, “Plaintiffs”), on behalf of themselves and the Settlement Class, have reached a proposed settlement of the Action for $44,000,000 in cash that, if approved, will resolve all claims in the Action (the “Settlement”). 

If you are a member of the Settlement Class, your rights will be affected and you may be eligible for a payment from the Settlement.  The Settlement Class consists of:

All persons who purchased or otherwise acquired Adeptus Class A common stock during the period from June 25, 2014 through March 1, 2017, inclusive, and were damaged thereby. 

Included in the Settlement Class are all persons and entities who purchased shares of Adeptus Class A common stock on the open market and/or pursuant or traceable to the July 29, 2015 and June 8, 2016 Offerings during the Class Period. The Settlement Class includes a subclass of all persons who purchased Adeptus Class A common stock contemporaneously with sales of Adeptus securities made or caused by certain Defendants in connection with Adeptus’s July 2015 and June 2016 secondary public offerings of Adeptus Class A common stock, and were damaged thereby (the “20A Sub-Class”).  

Certain persons and entities who are excluded from the Class by definition (see paragraph 26 of the Notice) or who request exclusion pursuant to the instructions set forth in the Notice (see paragraphs 76-79 of the Notice).

Please read the Notice to fully understand your rights and options.  Copies of the Notice and Claim Form can be found on the Case Documents page.  You may also visit the Settlement website,, for more information about the Settlement.

If you are a member of the Settlement Class, in order to be potentially eligible to receive a payment under the proposed Settlement, you must submit a Claim Form postmarked no later than June 8, 2020

Payments to eligible claimants will be made only if the Court approves the Settlement and a plan of allocation, and only after any appeals are resolved, and after the completion of all claims processing.  Please be patient, as this process will take some time to complete.


June 8, 2020

Claim Filing Deadline. Claim Forms must be postmarked (if mailed), or submitted on-line, no later than June 8, 2020 to be eligible for a payment from the Settlement.

April 29, 2020

Exclusion Deadline. To exclude yourself from the Settlement Class, you must submit a written request for exclusion so that it is received no later than April 29, 2020, in accordance with the instructions in the Notice.

April 29, 2020

Objection Deadline. Any objections to the proposed Settlement, the proposed Plan of Allocation, and/or the motion for attorneys’ fees and expenses, must be submitted or filed no later than April 29, 2020, in accordance with the instructions in the Notice. In addition, please email a copy of your objection to and

May 20, 2020
at 11:30 a.m.

Settlement Hearing.  The Settlement Hearing will be conducted by telephone on May 20, 2020 at 11:30 a.m. Central Time, before the Honorable Amos L. Mazzant, III. The Settlement Hearing will be held by the Court to consider, among other things, whether the proposed Settlement is fair, reasonable, and adequate and should be approved; whether the proposed Plan of Allocation is fair and reasonable and should be approved; and whether Lead Counsel’s motion for attorneys’ fees and expenses should be approved. For details on how to participate please see the top of this page. 



The action arises from the rapid decline and ultimate implosion of Adeptus, formerly the largest operator of freestanding emergency rooms in the United States. The complaint asserts claims under the federal securities laws concerning misstatements made by Adeptus, its executives, underwriters, and the private equity fund that controlled the Company (collectively, “Defendants”) that overstated the Company’s profitability and concealed a number of serious strains on its liquidity. Among other things, Defendants’ misstatements concealed that: (1) Adeptus routinely overbilled patients for minor treatments, leading insurers to reject claims for reimbursement and threatening the Company’s revenues and the quality of its receivables; (2) the Company suffered from serious internal control failures that materially affected the Company’s revenue collection; and (3) that the Company’s coverage of 100% of pre-opening operating costs and losses on its key joint ventures with existing health systems, which created a serious drag on the Company’s liquidity. Defendants’ misstatements caused Adeptus’ share price to soar during the Class Period. Capitalizing on Adeptus’ artificially inflated stock price, the Company’s former CEO and CFO alone were able to reap over $50 million by selling their personally held Adeptus shares at artificially inflated prices.

Investors learned about Adeptus’ misconduct and the Company’s true financial condition through a series of corrective disclosures, including shocking revelations that the Company was facing a liquidity crisis. These corrective disclosures wiped out hundreds of millions of dollars in shareholder value. Plaintiffs filed the Amended Complaint on November 21, 2017. Defendants’ motions to dismiss were filed February 5, 2018, and were fully briefed on June 15, 2018.

On September 12, 2018, the court denied in substantial part Defendants’ motions to dismiss, sustaining all of Plaintiffs’ Exchange Act claims as well as a significant portion of their Securities Act claims – and dismissing only certain Securities Act claims based on two early registered offerings in 2014 and 2015.

On December 7, 2018, Plaintiffs moved for class certification. Plaintiffs’ motion was fully briefed as of May 6, 2019.

Also, on January 31, 2019, Plaintiffs moved to amend the complaint to add additional claims (alleging insider trading), additional false statements, and to specify certain entities affiliated with Adeptus’s private equity sponsor as named defendants. On February 14, 2019, Defendants consented to Plaintiffs’ motion to amend, though they stated that they would move to dismiss the amended claims. On March 5 and 5, 2019, certain of the Defendants filed motions to dismiss certain of the claims newly asserted in the Second Amended Complaint. These motions, along with Plaintiffs’ class certification motion, were fully briefed and pending at the time the parties reached their agreement to settle the action.

The parties participated in a mediation with a former United States District Judge on April 26, 2019. The mediation did not result in settlement, but the parties continued their negotiations in the months that followed (while continuing to conduct extensive discovery).

Fact discovery concluded in August 2019.

On October 14, 2019, the parties reached an agreement to resolve the case for $44 million. On November 26, 2019, the parties executed the Stipulation of Settlement setting out the full terms of their agreement to settle and Plaintiffs filed a motion for preliminary approval of the settlement.

On January 9, 2020, the court preliminarily approved the Settlement, authorized sending notice of the Settlement to potential class members, and scheduled a final hearing on approval of the Settlement for May 20, 2020.

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