The TPG Exactech lawsuit is a $1 billion action filed in the Delaware Court of Chancery on February 5, 2026, by the Exactech Settlement Trust against private equity firm TPG Inc. and more than a dozen affiliates and individuals. The Trust alleges TPG took operational control of orthopedic implant maker Exactech after acquiring it in 2018, concealed known defects in joint replacement devices, delayed recalls, and ultimately pushed the company into bankruptcy to escape liability for injuries to thousands of patients.
Who Filed the Lawsuit and What It Seeks
Trustee Ellen K. Reisman filed the verified complaint as Case No. 2026-0129-MTZ. The Trust was created through Exactech’s Chapter 11 plan and funded with $2 million specifically to pursue claims against TPG that the bankruptcy estate had preserved rather than released.
The complaint brings ten counts. They include a request for a declaratory judgment that TPG is the alter ego of Exactech or its holding company Osteon Holdings, claims for actual and constructive fraudulent transfer tied to a management services agreement, corporate waste, and multiple counts of breach of fiduciary duty and aiding and abetting those breaches. Damages sought: at least $1 billion.
Named defendants include TPG Inc. and affiliated entities, TPG Senior Advisor Jeffrey Binder (who served as co-executive chairman and later CEO of Exactech), TPG partners Kendall Garrison, John Schilling, and Todd Sisitsky (all of whom sat on the Exactech and Osteon Holdings boards), Exactech founders William and David Petty, and individuals Michael Tepatti, Bennett Yasskin, and John Lin.
What TPG Is Accused of Doing
Concealing Defects and Delaying the Recall
The complaint alleges TPG directed a strategy to cover up known product defects. According to the Trust, Binder led efforts in late 2018 to prevent the Hospital for Special Surgery, described in the complaint as the leading orthopedic hospital in the country and Exactech’s largest institutional customer, from publicly disclosing its findings about rising rates of oxidation and delamination in Exactech knee components. The Trust alleges Binder and Schilling were “dismissive of complaints before the FDA” and directed Exactech management to delay any genuine investigation into the root cause of the problems HSS had raised.
The complaint further alleges TPG orchestrated a “dilatory” recall strategy that allowed defective products to continue being sold after the company knew of the packaging problems.
TPG denies these claims. A TPG spokesperson told Becker’s Hospital Review that the packaging issue predated the firm’s ownership, that TPG first learned of it in 2021, and that the company launched an investigation and initiated a voluntary recall immediately.
Alter Ego and Corporate Control
Central to the lawsuit is the claim that TPG exercised such thorough control over Exactech that the two should be treated as one entity. The Trust alleges TPG populated the board with its partners and loyalists, installed its own senior advisors in management, and directed “key operational, regulatory, and litigation decisions.” The complaint accuses TPG of disregarding “any guise of corporate separateness” and using what it calls “sham Osteon alter-egos” to create a buffer between TPG and Exactech’s mounting liabilities.
Fees Extracted Through a Management Agreement
The Trust targets a management services agreement under which TPG entities charged Exactech fees for what the complaint calls “purported consulting services.” The fraudulent transfer and corporate waste counts flow from this arrangement. The theory: TPG used the agreement to extract value from a company it controlled while directing a strategy to hide product failures.
Bankruptcy as an Exit
The complaint asserts TPG forced Exactech into bankruptcy not because the company needed restructuring, but as a tactical move to extinguish TPG’s own liability through a “cheap bankruptcy-approved release” from more than a billion dollars in potential patient claims.
The Implants Behind the Case
Exactech manufactured knee, hip, ankle, and shoulder replacement devices from its headquarters in Gainesville, Florida. Beginning in 2004, roughly 80% of the company’s knee and ankle polyethylene inserts were packaged in vacuum bags missing a critical oxygen barrier layer. Oxygen seeped in and degraded the plastic components through oxidation, causing them to wear, crack, or fail far sooner than expected. Patients suffered bone loss, loosening joints, pain, swelling, and in many cases revision surgery.
The first recall came in June 2021 for certain hip liners, expanded in August 2021 to knee and ankle implants, and broadened again in February and August 2022. The FDA classified the recalls as Class II, meaning the products could cause serious injury.
Scope was substantial. Approximately 147,732 knee and ankle devices had been implanted in the United States since 2004, and the worldwide recall potentially covered more than 484,000 units across the knee, hip, and ankle lines. Data from the Australian Orthopaedic Association’s joint replacement registry showed revision rates for Exactech’s Optetrak polyethylene devices running as high as 5.85 times the expected rate at 18 months. A retrospective study of nearly 8,000 Optetrak Logic implants found revision-free survival dropped from 98% at two years to 86% at ten years, with more than half of revisions attributed to mechanical failure from wear.
How TPG Acquired Exactech
TPG Capital’s acquisition closed on February 14, 2018, at $49.25 per share in a transaction valued at roughly $737 million. TPG structured the purchase through a chain of subsidiaries: Osteon Holdings, Inc., Osteon Merger Sub, Inc., and Osteon Intermediate Holdings II, Inc. Exactech merged with Osteon Merger Sub and became a wholly owned subsidiary of Osteon Holdings. The founders and certain management shareholders rolled over about 18.8% of the outstanding shares into equity in the new structure. Exactech’s stock stopped trading on the Nasdaq and the company went private.
After the deal, TPG filled three of nine seats on Exactech’s board and placed its people in three key executive roles: CEO, CFO, and Senior Vice President of Business Development. The company operated under a management services agreement with TPG. Those facts form the backbone of the Trust’s alter-ego theory.
How the Case Reached Delaware
Patients’ individual product liability lawsuits were consolidated into a multidistrict litigation, MDL No. 3044, in the Eastern District of New York before Judge Nicholas G. Garaufis. Roughly 1,838 lawsuits were pending in the MDL as of 2026.
In March 2024, Judge Garaufis dismissed TPG and its subsidiaries from the personal injury cases, ruling that plaintiffs had not sufficiently alleged the dominance and control needed to pierce the corporate veil under Florida law. The Delaware complaint argues that “the current record as to TPG control was not before the MDL court.”
Exactech filed for Chapter 11 bankruptcy on October 29, 2024, in the U.S. Bankruptcy Court for the District of Delaware, Case No. 24-12441, before Judge Laurie Selber Silverstein. The filing froze the MDL. Bellwether trials scheduled for mid-2025 never took place.
The bankruptcy became a fight over whether TPG would walk away. On March 20, 2025, Exactech’s board announced a proposed settlement that would have released TPG and related parties from all claims for $8.1 million. The Unsecured Creditors’ Committee, represented by Brown Rudnick partner David Molton, opposed the deal, arguing the bankruptcy was being “wrongly used to absolve TPG and other non-debtors of liability” for “little to no value” to tort claimants. Claimants overwhelmingly rejected the plan.
In a May 20, 2025 ruling on discovery disputes, Judge Silverstein observed that “Exactech and TPG are and always have been adverse” on the alter ego and veil-piercing claims. By July 2025 the UCC had secured a modified plan that preserved claims against TPG instead of releasing them. Judge Silverstein approved the revised plan on September 15, 2025, establishing the settlement trust with $2 million to pursue TPG. The plan became effective on October 31, 2025, and Exactech emerged from bankruptcy under new ownership. The Trust filed in Delaware three months later.
Where Things Stand
As of mid-2026, the Delaware Chancery case is in its early stages, with no reported rulings on motions to dismiss or discovery disputes. The MDL in the Eastern District of New York remains effectively frozen, with the bankruptcy stay still blocking individual injury cases. No bellwether trials have been held, and no global settlement of the underlying product liability claims has been reached. TPG continues to deny all allegations and maintains that the packaging defect predated its ownership.