Belhealth Investment Partners, Llc

Allegations: QUI TAM CIVIL ACTION IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION-LOS ANGELES (THE "MATTER") ALLEGING LINDEN CARE, A SPECIALTY PAIN MANAGEMENT PHARMACY, OF MISCONDUCT RELATING TO THE PRESCRIPTION FULFULLMENT OF SUBSYS, A PAIN RELIEF MEDICATION. LINDEN CARE WAS A PORTFOLIO COMPANY OF ONE OF THE ADVISOR'S CLIENTS. ADVISOR AND ADVISOR AFFILIATES WERE SUBSEQUENTLY NAMED. Status: Final Summary: THE FALSE CLAIMS ACT (31U.S.C. 3729-33) INCENTIVIZES A RELATOR OR WHISTLEBLOWER TO FILE A QUI TAM LAWSUIT ON BEHALF OF THE US GOVERNMENT. IN FACT, SINCE 1986, MORE THAN $7.3 BILLION HAS BEEN PAID IN WHISTLE BLOWER AWARDS. ON OCTOBER 25, 2016, LINDEN CARE, A SPECIALTY PAIN MANAGEMENT PHARMACY, WAS NAMED IN A QUI TAM/FALSE CLAIMS CIVIL ACTION, BROUGHT BY A RELATOR OR WHISTLEBLOWER SEEKING MONETARY DAMAGES, IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, WESTERN DISTRICT - LOS ANGELES ALLEGING VARIOUS MISCONDUCT RELATED TO THE PRESCRIPTION FULFILMENT OF SUBSYS, A PAIN RELIEF MEDICATION. LINDEN CARE WAS A PORTFOLIO COMPANY OF ONE OF THE INVESTMENT ADVISER'S CLIENTS. THE INITIAL COMPLAINT DID NOT INCLUDE THE INVESTMENT ADVISER OR ITS ADVISORY AFFILIATES. THE US GOVERNMENT DECLINED TO INTERVENE OR JOIN THE CIVIL ACTION, BUT THE RELATOR/WHISTLEBLOWER AND THEIR ATTORNEY PURSUED THE CIVIL CLAIM REGARDLESS, WITHOUT THE RESOURCES OF THE US GOVERNMENT. AFTER THE GOVERNMENT DECLINED TO JOIN THE ACTION, PLAINTIFF'S COUNSEL FILED A SECOND AMENDED COMPLAINT ON SEPTEMBER 18, 2018, NAMING THE INVESTMENT ADVISER AND CERTAIN ADVISORY AFFILIATES. THREE YEARS LATER, THE PLAINTIFFS' COUNSEL FILED A THIRD AMENDED COMPLAINT ON AUGUST 27, 2021, NAMING CERTAIN PERSONNEL AFFILIATED WITH THE INVESTMENT ADVISER. ON MAY 4, 2023, AFTER ALMOST SEVEN YEARS OF LITIGATION AND LEGAL FEES, THE PARTIES DECIDED TO SETTLE THE MATTER TO AVOID THE COST AND UNCERTAINTY OF PROTRACTED LITIGATION. THE PARTIES EXECUTED A SETTLEMENT AGREEMENT FOR $9.0 MILLION IN WHICH THE DEFENDANTS DID NOT ADMIT TO, NOR WERE FOUND LIABLE FOR THE ALLEGATIONS AND JOINTLY DISMISSED THE ACTION. THE SETTLEMENT WAS PAID BY LINDEN CARE AND FUNDED BY A DISTRIBUTION CLAWBACK ON MAY 5, 2023, ISSUED BY THE BELHEALTH INVESTMENT FUND L.P. TO BOTH ITS LIMITED PARTNERS ($6,960,000) AND THE GENERAL PARTNER ($1,740,000). THE REMAINING $300,000 WAS PAID BY THE INSURANCE COMPANY.