The lawsuit arose after the company restated earnings for 1996, 1997 and the first three quarters of 1998. The company was allegedly concealing millions of dollars in losses through creative accounting, and the restatement killed a planned $487 million purchase of the company by rival American Retirement Corp.
ALC is contributing approximately $10 million to the settlement, and its liability insurance carriers are contributing approximately $19 million, and certain other defendants contributing the remainder. The settlement is one of the largest securities settlements ever in Oregon.
ALC will take the $10 million charge in the third quarter, resulting in a loss of approximately 52 cents a share. At close of markets Wednesday, shares of ALC were trading at $22/share, up 6 cents for the day, and $2 above its 52-week low.
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