Inovalon Pares Down $7 Billion Buyout Challenge Before Trial

Inovalon Holdings Inc. shed a claim before it heads to trial over its $7.3 billion sale to a private equity consortium led by Nordic Capital Svenska AB.

A Delaware judge let a pension fund lawsuit move forward Tuesday with most claims that Inovalon’s senior leaders engineered an underpriced buyout that favored corporate insiders, shortchanged public investors, and kept shareholders in the dark about significant conflicts of interest. The same judge had previously dismissed the case, calling the conflict allegations underwhelming, before the state’s top court revived it.

The Bowie, Md.-based company, which describes itself as a cloud-based ...