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CaptureRx seeks court approval of lawsuit settlement; threatens to consider bankruptcy if not approved (updated)

Posted on February 12, 2022 by Dissent

Updated March 8: According to the TopClassActions website, the court has granted preliminary approval to a $4.75 million settlement between CaptureRX and consumers in six separate class-action lawsuits that all accused the pharmacy giant of negligence after a 2021 data breach:

  • California residents whose information was stored with CaptureRX can submit claims of up to $100 while consumers in other parts of the country will receive $25 cash payouts.
  • As part of the settlement, CaptureRX will also have to “develop, implement and maintain a comprehensive information security program that is reasonably designed to protect the security, integrity and confidentiality” of patients’ personal data.
  • Class counsel says “these benefits represent a highly favorable compromise that balances the merits of plaintiffs’ claims and the likelihood of succeeding at trial and on appeal with the attendant risks. By settling now, the settlement class can take advantage of remedies that would be unavailable or worth substantially less by the time of a litigated final judgment.”

The CaptureRx (NEC Networks) data breach was one of the biggest reported breaches involving a business associate in 2021, affecting dozens of its clients (see also this list) and more than 2.3 million patients.

Now the company is seeking court approval for a $4.75 million settlement of a class action lawsuit, claiming that if the court fails to approve the settlement, the company may have to file for bankruptcy:

Christopher Hotchkiss, CEO of CaptureRx parent company NEC Networks, said in a Friday court filing that it would “strongly consider filing for bankruptcy” if the settlement isn’t finalized. The settlement requires a San Antonio federal judge’s approval.

“CaptureRx is not a large national or multinational company and has limited resources,” he said in the court papers. “CaptureRx faces demands for indemnity from numerous customers…that have and continue to put severe financial strain on the company.”

Read more at San Antonio Express-News.

 

 

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