City of Pittsburgh Comprehensive Municipal Pension Trust Fund v. Benefitfocus, Inc.

The action arises from the secondary public offering of the common stock of cloud-based benefits management platform and services provider Benefitfocus, Inc. (Benefitfocus or the Company) commenced on or about March 1, 2019, and alleged misstatements and omissions of material fact made to investors in the Offering Documents issued in connection with the SPO.  More specifically, the Action concerns Defendants’ alleged failure to disclose that prior to the SPO, non-party Mercer Health & Benefits, LLC (Mercer Health), allegedly one of Benefitfocus’s most important customers, was purportedly terminating its contract with the Company and would be transitioning off the Benefitfocus platform.  (Defendants deny that Lead Plaintiff has asserted any valid claims as to any of them, and expressly deny any and all allegations of fault, liability, wrongdoing, or damages whatsoever.) 13.  As a result, Lead Plaintiff alleged that the Offering Documents were false and misleading for several reasons, including: (i) the alleged termination of the agreement with Mercer Health was falsely portrayed as an amendment in the Offering Documents; (ii) purported opportunities arising from the change in relationship with Mercer Health were allegedly non-existent; and (iii) the Company’s financial condition was allegedly worse than the Offering Documents portrayed.

On April 23, 2021, Lead Plaintiff filed an Amended Class Action Complaint for Violations of the Securities Act (the Amended Complaint).  The Amended Complaint alleges violations of Sections 11, 12(a)(2), and 15 of the Securities Act on behalf of a putative class of all persons or entities who purchased or otherwise acquired Benefitfocus common stock pursuant and/or traceable to the Offering Documents, and who were damaged thereby.

On June 22, 2021, Defendants filed three separate motions to dismiss the Amended Class Action Complaint.  The motions to dismiss were denied in substantial part on September 28, 2021, and three written opinions were entered by the Court in early October 2021.  On January 11, 2022, Lead Plaintiff moved for class certification.

On February 9, 2022, an agreement in principle was reached to settle the claims against all Defendants for $11,000,000 in cash.  On April 13, 2022, Lead Plaintiff filed a motion with the Court seeking preliminary approval of the settlement.

The case is City of Pittsburgh Comprehensive Municipal Pension Trust Fund v. Benefitfocus, Inc. et al., No. 651425/2021, in the Supreme Court of the State of New York.  Labaton Keller Sucharow represents Plaintiff City of Pittsburgh Comprehensive Municipal Pension Trust Fund.

Submit Claim Form

If you purchased or otherwise acquired publicly traded common stock pursuant and/or traceable to the Offering Documents issued in connection with the Company’s March 1, 2019 secondary public offering and/or you subsequently purchased or otherwise acquired Benefitfocus publicly traded common stock from March 1, 2019 through November 5, 2020, inclusive (the Class Period), and were damaged thereby, you may be entitled to a payment from a class action settlement.  To be eligible for a payment, you must submit a Claim Form to the Claims Administrator by December 27, 2022.

Settlement Hearing

The Court held a Settlement Hearing on December 1, 2022, and approved the Settlement and Plan of Allocation, and awarded attorneys’ fees and expenses.

If you have questions about the Settlement, please contact Labaton Keller Sucharow at settlementquestions@labaton.com or 1-888-219-6877, or contact the Claims Administrator, at 1-877-869-0224.

Additional information about the Settlement can also be found at www.BenefitfocusSecuritiesSettlement.com.