Inovalon Sued Over Stock Structure Before $7 Billion Buyout Deal

A pension fund sued Inovalon Holdings Inc. and its board in Delaware, claiming the health technology company’s planned $7.3 billion buyout by a private equity consortium will be “tainted"—unless it’s restructured—by investor votes that violate its charter.

The lawsuit, filed in Delaware Chancery Court by the Steamfitters Local 449 Pension Fund, takes aim at a series of stockholder votes on the take-private sale to Nordic Capital, Insight Partners, and 22C Capital in a deal that will also roll over $1.3 billion worth of equity held by affiliates of CEO Keith R. Dunleavy.

Inovalon didn’t immediately respond to a request for ...