Medtronic has agreed to pay a $54.5 million class-action settlement to investors to resolve allegations that a heart-pump company it acquired in 2016, HeartWare, repeatedly misled investors about the safety of an important new medical device under clinical testing.

The class-action investors, including the St. Paul Teachers' Retirement Fund Association, the lead plaintiff, allege HeartWare and its former CEO Douglas Godshall, lied repeatedly to investors about the fate of a product that was supposed to become HeartWare's major growth driver for years to come.

Medtronic would not be admitting any wrongdoing as part of the proposed settlement, which still requires judge approvals and advertising to the class members. But the investors said in court filings that they were satisfied with a hard-fought settlement, which represented a large share of what they could have won at trial, estimated between $82 million and $218 million. Attorneys fees would comprise 24 percent of the settlement.

"Lead plaintiff believes that the proposed settlement represents a very favorable result for the class because it provides a significant recovery, particularly when compared to the risks that continued litigation might result in a smaller recovery, or no recovery at all," the St. Paul teachers fund said in a legal filing on Friday in the federal Southern District of New York.

HeartWare was one of a handful of companies worldwide to make a sophisticated class of implantable devices known as heart pumps, more formally known as left-ventricular assist devices (LVADs), that treat advanced cases of heart failure. LVADs make up an $800 million global market.

The devices use a propeller-like system to push a person's blood when the heart's main pumping chamber is too weak to do the work on its own. Past studies have shown that such pumps get gummed up with blood clots as often as 4 percent of the time, and HeartWare told investors that its new MVAD, or miniaturized ventricular-assist device, could essentially eliminate the problem, the lawsuit says.

In reality, three of the first 11 patients in Europe who received the device in a clinical trial experienced the problem. Overall, nearly half of all the patients in the European trial had the problem, causing the company to close down the trial in 2016. The MVAD has never been brought to market in any country. HeartWare stock crashed from $81.81 in September 2015 to $26.50 in January 2016.

Medtronic announced its intentions to buy HeartWare on June 27, 2016, two days before the St. Paul teachers' fund filed its amended complaint. The deal closed on Aug. 23 for $1.1 billion, valuing HeartWare at $58 per share.

Although the plaintiffs scored pretrial legal victories and had 450,000 pages of evidence, the attorneys said they still faced significant challenges at trial, including proving that HeartWare executives' statements were knowingly false or reckless. "Defendants would have pointed to the lack of any action by the SEC or FDA in support of their argument that they did not act with fraudulent intent," the settlement proposal says.