Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_17-cv-01850/USCOURTS-cand-4_17-cv-01850-1/pdf.json

Nature of Suit Code: 160
Nature of Suit: Stockholder's Suits
Cause of Action: 28:1332 Diversity-Breach of Contract

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[PROPOSED] ORDER GRANTING

PRELIMINARY APPROVAL OF

SETTLEMENT 

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UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

OAKLAND DIVISION 

IN RE MCKESSON CORPORATION 

DERIVATIVE LITIGATION 

Case No. 4:17-cv-01850-CW 

[PROPOSED] ORDER GRANTING 

PRELIMINARY APPROVAL OF 

SETTLEMENT AND AUTHORIZING 

DISSEMINATION OF NOTICE 

 Re: Dkt Nos. 203, 218 

 

WHEREAS, a consolidated stockholder derivative action is 

pending in this Court entitled In re McKesson Corporation 

Derivative Litigation, No. 4:17-cv-01850-CW (the “California 

Action”); 

WHEREAS, (a) plaintiffs in the California Action, Eli 

Inzlicht; Vladimir Gusinsky, as Trustee for the Vladimir Gusinsky 

Living Trust; Chaile Steinberg; Michael Berent, Trustee of the 

Police & Fire Retirement System City of Detroit; and Amalgamated 

Bank, as Trustee for Longview Largecap 500 Index Fund and 

Longview Largecap 500 Index VEBA Fund (collectively, the 

Case 4:17-cv-01850-CW Document 219 Filed 01/31/20 Page 1 of 12
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[PROPOSED] ORDER GRANTING

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“California Plaintiffs”); (b) plaintiffs in the stockholder 

derivative action pending in the Court of Chancery of the State 

of Delaware (the “Delaware Court”), styled as In re McKesson 

Corporation Stockholder Derivative Litigation, Consol. C.A. No. 

2017-0736-SG (the “Delaware Action” and, together with the 

California Action, the “Actions”), Katielou Greene and Charles 

Ojeda (collectively, the “Delaware Plaintiffs” and, together with 

the California Plaintiffs, “Plaintiffs”); (c) current and former 

defendants in the California Action or the Delaware Action, Andy 

Bryant; Wayne A. Budd; John Hammergren; M. Christine Jacobs; 

Marie L. Knowles; Edward Mueller; Donald Knauss; Susan Salka; N. 

Anthony Coles; Alton Irby III; David Lawrence; Jane Shaw; Laureen 

Seeger; Paul Julian; and Mark Walchirk (collectively, 

“Defendants”); (d) the Special Litigation Committee formed by the 

Board of Directors of Nominal Defendant McKesson Corporation (the 

“SLC”); and (e) Nominal Defendant McKesson Corporation (“Nominal 

Defendant,” “McKesson,” or the “Company” and, together with 

Plaintiffs, Defendants, and the SLC, the “Parties”) have reached 

a proposed settlement on the terms and conditions set forth in 

the Stipulation and Agreement of Compromise, Settlement, and 

Release dated December 11, 2019, (the “Stipulation”) subject to 

the approval of this Court (the “Settlement”); 

WHEREAS, the California Plaintiffs have made an application 

in this Court, pursuant to Rule 23.1 of the Federal Rules of 

Civil Procedure, for an order preliminarily approving the 

Settlement in accordance with the Stipulation and allowing notice 

to McKesson stockholders as more fully described herein; 

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[PROPOSED] ORDER GRANTING

PRELIMINARY APPROVAL OF

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WHEREAS, the Court has read and considered: (a) the 

California Plaintiffs’ motion for preliminary approval of the 

Settlement and authorization to send notice of the Settlement to 

McKesson stockholders, and the papers filed and arguments made in 

connection therewith; and (b) the Stipulation and the exhibits 

attached thereto; and 

WHEREAS, unless otherwise defined herein, all capitalized 

words contained herein shall have the same meanings as they have 

in the Stipulation; 

NOW, THEREFORE, THE COURT HEREBY ORDERS: 

1. Preliminary Approval of the Settlement – The Court 

hereby preliminarily approves the Settlement, as embodied in the 

Stipulation and the exhibits attached thereto, subject to further 

consideration at the Settlement Fairness Hearing to be held as 

described below. 

2. Settlement Fairness Hearing – The Court will hold a 

hearing (the “Settlement Fairness Hearing”) on April 21, 2020, at 

2:30 p.m., at the United States District Court for the Northern 

District of California, Oakland Courthouse, 1301 Clay Street, 

Oakland, CA 94612, for the following purposes: (a) to determine 

whether the California Plaintiffs and Plaintiffs’ Lead Counsel 

have adequately represented the interests of McKesson and its 

stockholders; (b) to determine whether the proposed Settlement on 

the terms and conditions provided for in the Stipulation is fair, 

reasonable, and adequate to McKesson and its stockholders, and 

should be approved by the Court; (c) to determine whether the 

revised proposed Judgment, Docket No. 218-1, should be entered 

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[PROPOSED] ORDER GRANTING

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dismissing the California Action with prejudice; (d) to determine 

whether the application by Plaintiffs’ Lead Counsel for an award 

of attorneys’ fees and expenses should be approved; and (e) to 

consider any other matters that may properly be brought before 

the Court in connection with the Settlement. 

3. The Court reserves the right to adjourn the Settlement 

Fairness Hearing or any adjournment thereof, including the 

consideration of the application for attorneys’ fees and 

expenses, without further notice of any kind. The Court further 

reserves the right to approve the Stipulation and the Settlement, 

at or after the Settlement Fairness Hearing, with such 

modifications as may be consented to by the Parties and without 

further notice to McKesson stockholders. 

4. Manner of Providing Notice – Notice of the Settlement 

and the Settlement Fairness Hearing shall be given by McKesson as 

follows: 

(a) no later than ten (10) calendar days following the 

date of entry of this Order (the “Notice Date”), McKesson 

shall direct its third-party investor communications 

provider, Alliance Advisors, to send the Notice, 

substantially in the form attached hereto as Exhibit B-1, to 

all then-current McKesson stockholders as of the Notice Date 

in the same manner that McKesson distributes notice to 

McKesson’s stockholders of McKesson’s annual meeting of 

stockholders. With respect to shares held by a brokerage 

firm, bank, or other entity as a record holder for the 

beneficial interest of persons or organizations other than 

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[PROPOSED] ORDER GRANTING

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themselves, notice shall be sent directly to such beneficial 

owners in the manner that the beneficial owner has requested 

to receive stockholder materials from the brokerage firm, 

bank, or other entity holding their respective shares; 

(b) not later than the Notice Date, McKesson shall 

post a hyperlink to a copy of the Stipulation and the Notice 

and any other materials relevant to the Settlement on the 

“Investor Relations” section of the Company’s website, 

investor.mckesson.com, and such documents shall remain 

posted to the hyperlinked website through the Effective Date 

of the Settlement; 

(c) not later than ten (10) calendar days after the 

Notice Date, McKesson shall also cause the Summary Notice, 

substantially in the form attached hereto as Exhibit B-2, to 

be published once in the national edition of the New York 

Times and to be transmitted once over the PR Newswire; and 

(d) not later than thirty-five (35) calendar days 

prior to the Settlement Fairness Hearing, McKesson’s Counsel 

shall serve on Plaintiffs’ Lead Counsel and file with the 

Court proof, by affidavit or declaration, of compliance with 

paragraphs 4(a)-(c), above. 

5. Approval of Form and Content of Notice – The Court (a) 

approves, as to form and content, the Notice and the Summary 

Notice, attached hereto as Exhibits B-1 and B-2, respectively, 

and (b) finds that the distribution of the Notice and the 

publication of the Summary Notice in the manner and form set 

forth in paragraph 4 of this Order: (i) constitutes notice that 

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[PROPOSED] ORDER GRANTING

PRELIMINARY APPROVAL OF

SETTLEMENT 

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is reasonably calculated, under the circumstances, to apprise 

McKesson stockholders of the pendency of the Actions, of the 

effect of the proposed Settlement (including the Releases to be 

provided thereunder), of Plaintiffs’ Lead Counsel’s application 

for an award of attorneys’ fees and expenses, of their right to 

object to the Settlement or Plaintiffs’ Lead Counsel’s 

application for attorneys’ fees and expenses, and of their right 

to appear at the Settlement Fairness Hearing; (ii) constitutes 

due, adequate, and sufficient notice to all persons and entities 

entitled to receive notice of the proposed Settlement; and (iii) 

satisfies the requirements of Rule 23.1 of the Federal Rules of 

Civil Procedure, and the United States Constitution (including 

the Due Process Clause). The date and time of the Settlement 

Fairness Hearing shall be included in the Notice before it is 

distributed. 

6. Appearance and Objections at Settlement Fairness 

Hearing – Any current McKesson stockholder who or which continues 

to own shares of McKesson common stock as of the Notice Date 

(“Current McKesson Stockholder”) may file a written objection to 

the proposed Settlement or Plaintiffs’ Lead Counsel’s application 

for an award of attorneys’ fees and expenses, and appear at the 

Settlement Fairness Hearing and show cause, if he, she, or it has 

any cause why the proposed Settlement or the application for 

attorneys’ fees and expenses should not be approved; provided, 

however, that no such person or entity shall be heard or entitled 

to contest the approval of the terms and conditions of the 

proposed Settlement or the application for attorneys’ fees and 

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[PROPOSED] ORDER GRANTING

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expenses unless that person or entity has filed a written 

objection with the Court. Any written objection, together with 

copies of all other papers and briefs supporting the objection, 

must be mailed to the Office of the Clerk of the Court, United 

States District Court for the Northern District of California, 

Oakland Division, 1301 Clay Street, Oakland, CA 94612, or filed 

in person at any location of the United States District Court for 

the Northern District of California, so that it is filed or 

postmarked no later than twenty-one (21) calendar days prior to 

the Settlement Fairness Hearing. Any objections, filings, and 

other submissions must clearly identify the case name and action 

number, In re McKesson Corporation Derivative Litigation, No. 17-

cv-01850-CW, and they must: (a) state the name, address, and 

telephone number of the objector and must be signed by the 

objector; (b) state whether the objector is represented by 

counsel and, if so, the name, address, and telephone number of 

his, her, or its counsel; (c) contain a specific, written 

statement of the objection(s) and the specific reason(s) for the 

objection(s), including any legal and evidentiary support the 

objector wishes to bring to the Court’s attention, and if the 

objector indicates that he, she, or it intends to appear at the 

Settlement Fairness Hearing, the identity of any witnesses the 

objector may call to testify and any exhibits the objector 

intends to introduce into evidence at the hearing; and (d) must 

include documentation sufficient to prove that the objector owned 

shares of McKesson common stock as of the close of trading on the 

Notice Date. Plaintiffs’ Lead Counsel are authorized to request 

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[PROPOSED] ORDER GRANTING

PRELIMINARY APPROVAL OF

SETTLEMENT 

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from any objector documentation sufficient to prove continuous 

ownership of McKesson common stock. All objections will be 

scanned into the electronic case docket, and the parties will 

receive electronic notices of filings. Any Current McKesson 

Stockholder who or which has filed a written objection in the 

manner provided herein may also appear at the Settlement Fairness 

Hearing, either in person or through his, her, or its own 

attorney, at his, her, or its own expense. 

7. Any McKesson stockholder who or which does not make 

his, her, or its objection in the manner provided herein shall be 

deemed to have waived his, her, or its right to object to any 

aspect of the proposed Settlement or Plaintiffs’ Lead Counsel’s 

application for an award of attorneys’ fees and expenses 

(including any right of appeal) and shall be forever barred and 

foreclosed from objecting to the fairness, reasonableness, or 

adequacy of the Settlement or the requested attorneys’ fees and 

expenses, or from otherwise being heard concerning the Settlement 

or the requested attorneys’ fees and expenses in this or any 

other proceeding, but shall otherwise be bound by this Order, the 

Judgment to be entered, and the Releases to be given by the 

Settlement. 

8. Stay and Temporary Injunction – Until otherwise ordered 

by the Court, the Court stays all proceedings in the California 

Action other than proceedings necessary to carry out or enforce 

the terms and conditions of the Stipulation. Pending final 

determination of whether the Settlement should be approved, the 

Court (a) bars and enjoins Current McKesson Stockholders from 

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[PROPOSED] ORDER GRANTING

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commencing or prosecuting any action asserting any Settled 

Plaintiffs’ Claims or Settled Litigation Claims against any of 

the Released Defendants’ Parties; (b) bars and enjoins Current 

McKesson Stockholders from commencing or prosecuting any action 

asserting any Settled Defendants’ Claims or Settled Litigation 

Claims against any of the Released Plaintiffs’ Parties; and (c) 

bars and enjoins Current McKesson Stockholders from commencing or 

prosecuting any action asserting any Settled Litigation Claims 

against the SLC or the SLC’s Counsel. 

9. Notice Costs – McKesson shall assume all administrative 

responsibility for and will pay any and all Notice Costs, 

regardless of whether the Court grants final approval of the 

Settlement or the Effective Date fails to occur. Neither 

Plaintiffs nor their counsel shall be responsible for any Notice 

Costs nor shall any Notice Costs be paid from the Cash Settlement 

Fund. 

10. Settlement Fund – All funds held in the Derivative 

Escrow Account by Citibank, N.A. (which the Court approves as the 

Derivative Escrow Agent) shall be deemed and considered to be in 

custodia legis of the Court, and shall remain subject to the 

jurisdiction of the Court, until such time as the funds shall be 

paid out of the Derivative Escrow Account pursuant to the terms 

of the Stipulation or further order(s) of the Court.

11. Taxes – Plaintiffs’ Lead Counsel is authorized and 

directed to prepare any tax returns and any other tax reporting 

form for or in respect to the Cash Settlement Fund held in the 

Derivative Escrow Account, to pay from the Cash Settlement Fund 

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[PROPOSED] ORDER GRANTING

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held in the Derivative Escrow Account any Taxes and Tax Expenses 

owed with respect to the Cash Settlement Fund, and to otherwise 

perform all obligations with respect to Taxes and any reporting 

or filings in respect thereof without further order of the Court 

in a manner consistent with the provisions of the Stipulation. 

12. Use of This Order – Neither this Order, the Term Sheet, 

the Stipulation, including the exhibits thereto, the negotiations 

leading to the execution of the Term Sheet and the Stipulation, 

nor any proceedings taken pursuant to or in connection with the 

Term Sheet, the Stipulation, or approval of the Settlement 

(including any arguments proffered in connection therewith): (a) 

shall be offered against any of the Released Defendants’ Parties 

or the SLC as evidence of, or construed as, or deemed to be 

evidence of any presumption, concession, or admission by any of 

the Released Defendants’ Parties or the SLC with respect to the 

truth of any fact alleged by Plaintiffs or the validity of any 

claim that was or could have been asserted or the deficiency of 

any defense that has been or could have been asserted in the 

Actions or in any other litigation, or of any liability, 

negligence, fault, or other wrongdoing of any kind of any of the 

Released Defendants’ Parties or in any way referred to for any 

other reason as against any of the Released Defendants’ Parties, 

in any arbitration proceeding or other civil, criminal, or 

administrative action or proceeding, other than such proceedings 

as may be necessary to effectuate the provisions of the 

Stipulation; (b) shall be offered against any of the Released 

Plaintiffs’ Parties or the SLC, as evidence of, or construed as, 

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[PROPOSED] ORDER GRANTING

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or deemed to be evidence of any presumption, concession, or 

admission by any of the Released Plaintiffs’ Parties or the SLC 

that any of the Released Plaintiffs’ Parties’ claims are without 

merit, that any of the Released Defendants’ Parties had 

meritorious defenses, or that damages recoverable under the 

Complaints would not have exceeded the Settlement Consideration 

or with respect to any liability, negligence, fault, or 

wrongdoing of any kind, or in any way referred to for any other 

reason as against any of the Released Plaintiffs’ Parties, in any 

arbitration proceeding or other civil, criminal, or 

administrative action or proceeding, other than such proceedings 

as may be necessary to effectuate the provisions of the 

Stipulation; or (c) shall be construed against any of the 

Released Parties or the SLC as an admission, concession, or 

presumption that the consideration to be given in the Settlement 

represents the amount which could be or would have been recovered 

after trial; provided, however, that if the Stipulation is 

approved by the Court, the Parties, the Released Parties and 

their respective counsel, the SLC, and the SLC’s Counsel may 

refer to it to effectuate the protections from liability granted 

therein, to support any and all defenses or counterclaims based 

on res judicata, collateral estoppel, release, good-faith 

settlement, judgment bar or reduction or any other theory of 

claim preclusion or issue preclusion or similar defense or 

counterclaim, or otherwise to enforce the terms of the 

Settlement. 

// 

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[PROPOSED] ORDER GRANTING

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13. Termination of Settlement – If the Settlement is 

terminated as provided in the Stipulation, the Settlement is not 

approved, or the Effective Date of the Settlement otherwise fails 

to occur, this Order shall be vacated, rendered null and void, 

and be of no further force and effect, except as otherwise 

provided by the Stipulation, and this Order shall be without 

prejudice to the rights of the Parties or any McKesson 

stockholders, and the Parties shall revert to their respective 

litigation positions in the Actions as of October 15, 2019. 

14. Supporting Papers – Plaintiffs’ Lead Counsel shall file 

and serve the opening papers in support of the proposed 

Settlement, and Plaintiffs’ Lead Counsel’s application for an 

award of attorneys’ fees and expenses, no later than thirty-five 

(35) calendar days prior to the Settlement Fairness Hearing; and 

reply papers, if any, shall be filed and served no later than 

seven (7) calendar days prior to the Settlement Fairness Hearing. 

15. The Court retains jurisdiction to consider all further 

applications arising out of or connected with the proposed 

Settlement. 

IT IS SO ORDERED. 

Dated: 1/31/2020

CLAUDIA WILKEN 

United States District Judge 

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