Premier Inc. Board Sued Over $474 Million Payout to Insiders (2)

A pension fund sued Premier Inc.'s board in Delaware, claiming insiders were overpaid by $224.5 million as part of a $473.5 million transaction terminating a “tax receivable agreement” related to the health care company’s “up-C” structure.

The lawsuit, made public Thursday, also targets the company’s current and former CEOs. It accuses them of citing hundreds of millions in illusory tax benefits as they pushed to accelerate payments to the “member-owners” who held nonpublic equity units reflecting their interests in Premier before the initial public offering of its parent company.

The formula used to appraise the accelerated payments owed to company ...