Overstatement of revenue and understated risk of bad debt
In a Rule 10b-5 matter, Brattle analyzed how the company’s alleged misrepresentations of industry metrics overstated revenue and understated the risk of bad debt. Shareholders claimed that the company – a fast-growing healthcare provider – downplayed its competition risk from lower-cost alternatives and implemented pricing policies that could reduce revenue in the longer term. Our internal team worked with an academic expert in health economics to assess these claims by analyzing case issues on provider reimbursement and market competition. Following a detailed analysis of the alleged misrepresentations, the case settled.