Whistle-blower suits and the 2025 False Claims Act settlement

analysisOn 29 June 2018 Brooks Wallace, Roberta Farley and Manuel Fuentes filed a qui tam suit in the Northern District of Alabama on behalf of the United States and several states, alleging that Exactech sold misbranded and defective knee implants. The government declined to intervene, and the complaint was unsealed in August 2019. The Settlement Trust's complaint says the suit concerned the finned tibial tray, that TPG learned of it in 2019 and that it was ready for trial when Exactech filed for bankruptcy. ^{1 2 3}

qualification

The relators' allegations were resolved by settlement without a finding of liability; the Justice Department's release spells the second relator 'Robert Farley'. These are allegations in the Settlement Trust's complaint, which was pending in the Delaware Court of Chancery in October 2026; no court has ruled on them.

response

Exactech contested the suit. It moved to dismiss the complaint in December 2019, attaching an expert report and its earlier corporate integrity and deferred prosecution agreements; on 14 February 2020 the court struck the complaint as an impermissible shotgun pleading and denied that motion as moot. On 5 August 2020 the court granted in part and denied in part Exactech's motion to dismiss the amended complaint, dismissing the state-law claims without prejudice and leaving the federal claims pending, and Exactech answered the amended complaint on 19 August 2020.

outcome

Resolved by the $8 million False Claims Act settlement announced on 16 September 2025.

analysisA second qui tam suit by Dr. Pasquale Petrera in the District of Maryland named both Exactech and TPG Capital, L.P.; in March 2026 the United States declined to intervene in the remaining claims against TPG Capital. ^{1 2}

outcome

The claims against Exactech were resolved by the September 2025 settlement; those against TPG Capital, L.P. were dismissed without prejudice on 23 April 2026.

analysisOn 16 September 2025 the Justice Department announced that Exactech would pay $8 million, an amount based on its financial condition, to resolve allegations that it sold the finned tibial tray from 2008 to 2018 and the Logic and Truliant knees from 2019 to 2022 while knowing of their problems, causing false claims to Medicare, Medicaid and the Department of Veterans Affairs; the relators in both cases receive part of the sum. In May 2025 the company had refused a ten-year Corporate Integrity Agreement, and the HHS Office of Inspector General lists it in its heightened-scrutiny category. ^{1 2}

qualification

The Justice Department states that the claims resolved by the settlement are allegations only and that there has been no determination of liability.

analysisIn February 2025 the Alabama relators and the United States asked the bankruptcy court to rule that Exactech's debt to them could not be discharged because it arose from fraud; the court repeatedly extended the company's time to answer. ¹

outcome

The record shows extensions of the answer deadline to October 2025 and the $8 million settlement of the underlying claims; no ruling on dischargeability appears.