LabCorp 2014 Annual Report Download - page 48

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46
of the transaction, purported stockholders of Covance filed two putative class action lawsuits, one in the Delaware Court of
Chancery, and the other in Mercer County, New Jersey, against Covance, members of the Covance board of directors, the Company
and Neon Merger Sub, Inc., a wholly owned subsidiary of the Company. The lawsuits alleged breach of fiduciary duty and/or
other violations of state law arising out of the proposed acquisition. Each suit sought, among other things, injunctive relief enjoining
the merger. On January 21, 2015, the case in New Jersey was voluntarily dismissed without prejudice by the Plaintiff. On February
9, 2015, the Plaintiffs in the Delaware case entered into a memorandum of understanding with the Defendants regarding a settlement.
In connection with the settlement, the parties agreed that Covance would make additional disclosures to its stockholders. Subject
to the entry by the parties into a stipulation of settlement and customary conditions, including court approval, the settlement will
resolve all the claims that were or could have been brought, including all claims relating to the merger.
In December 2014, the Company received a Civil Investigative Demand issued pursuant to the federal False Claims Act from
the U.S. Attorney’s Office for South Carolina, which requests information regarding remuneration and services provided by the
Company to physicians who also received draw and processing/handling fees from competitor laboratories Health Diagnostic
Laboratory, Inc. and Singulex, Inc. The Company is cooperating with the request.
Under the Company's present insurance programs, coverage is obtained for catastrophic exposure as well as those risks required
to be insured by law or contract. The Company is responsible for the uninsured portion of losses related primarily to general,
professional and vehicle liability, certain medical costs and workers' compensation. The self-insured retentions are on a per
occurrence basis without any aggregate annual limit. Provisions for losses expected under these programs are recorded based upon
the Company's estimates of the aggregated liability of claims incurred. As of December 31, 2014, the Company had provided
letters of credit aggregating approximately $42.5 million, primarily in connection with certain insurance programs. The Company's
availability under its Revolving Credit Facility is reduced by the amount of these letters of credit.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.