CaptureRX Facing Bankruptcy Pending Decision About $4.75M Settlement
CaptureRX, a health IT services company, has reached a settlement with the 2.42 million patients whose data was stolen prior to a ransomware attack on the organization in early 2021. The CaptureRX incident was the fourth largest healthcare data breach last year.
If approved, the settlement would require CaptureRX to pay the breach victims a total of $4.75 million. Notably, the company’s CEO issued a statement as part of the proposed settlement that states if the arrangement is not approved, “CaptureRX will strongly consider filing for bankruptcy.”
“CaptureRx has a wasting insurance policy related to this case. The insurer is making a substantial contribution to the settlement. But based on its policy limits – the amount covered is less than half of the total settlement,” explained CEO Chris Hotchkiss in the proposal.
The company is facing “demands for indemnity from numerous customers, that were also named as defendants in the class action cases, that have and continue to put severe financial strain on the company,” he continued. As a result, the company owners “are funding part of the settlement with their own money.”
Walmart was also named as a defendant in the ongoing lawsuit. The proposed settlement will consolidate 10 ongoing class-action lawsuits that allege the vendor’s “willful and reckless violations of [patients’] privacy rights” led to the initial hack and subsequent data exfiltration.
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