Biomimetic Therapeutics Inc.
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Biomimetic Therapeutics Inc. Securities Settlement
The lawsuit was settled for additional disclosures in the proxy statement mailed to shareholders. The following is a summary of the proceedings in the lawsuit: ‘On November 19, 2012, BMTI and defendants Wright Medical Group, Inc. (Wright), Achilles Merger Subsidiary, Inc. (Merger Sub), and Achilles Acquisition Subsidiary, LLC (together with Wright and Merger Sub, the Wright Defendants) entered into an Agreement and Plan of Merger (the Merger Agreement) providing, among other things, that BMTI shareholders would receive, for each share of BMTI common stock, $1.50 in cash; 0.2482 shares of Wright common stock; and a contingent value right (CVR) to additional payments upon achievement of certain benchmarks (the Merger). Also on November 19, 2012, BMTI and Wright publicly announced that they had entered into the Merger Agreement. On November 20, 2012, Harry Leeser and Lillian Leeser commenced a putative class action in the Tennessee Court against Defendants on behalf of themselves and all of BMTI public stockholders, styled Leeser v. BioMimetic Therapeutics, Inc., et al., No. 8053 (the Leeser Action), alleging, among other things, that BMTI and the Board breached their fiduciary duties in connection with the Merger Agreement and that the Wright Defendants had aided and abetted such alleged breaches of fiduciary duty. The complaint in the Leeser Action sought, among other things, an injunction enjoining the consummation of the Merger. On November 21, 2012, Menachem Maiman commenced a putative class action in the Delaware Court of Chancery (the Delaware Court) against Defendants on behalf of himself and all of BMTI public stockholders, styled Maiman v. Lynch, et al., C.A. No. 8053-VCN (the Maiman Action), alleging, among other things, that BMTI and the Board breached their fiduciary duties in connection with the Merger Agreement and that the Wright Defendants had aided and abetted such alleged breaches of fiduciary duty. The complaint in the Maiman Action sought, among other things, an injunction enjoining the consummation of the Merger. On November 26, 2012, Denise Elliott commenced a putative class action in the Tennessee Court against Defendants on behalf of herself and all of BMTI public stockholders, styled Elliott v. BioMimetic Therapeutics, Inc., et al., No. 41601 (the Elliott Action), alleging, among other things, that BMTI and the Board breached their fiduciary duties in connection with the Merger Agreement and that the Wright Defendants had aided and abetted such alleged breaches of fiduciary duty. The complaint in the Elliott Action sought, among other things, an injunction enjoining the consummation of the Merger. On November 28, 2012, Robert Edwards commenced a putative class action in the Tennessee Court against Defendants on behalf of himself and all of BMTI public stockholders, styled Edwards v. BioMimetic Therapeutics, Inc., et al., No. 61613 (the Edwards Action, together with the Leeser Action and the Elliott Action, the Tennessee Actions), alleging, among other things, that BMTI and the Board breached their fiduciary duties in connection with the Merger Agreement and that the Wright Defendants had aided and abetted such alleged breaches of fiduciary duty and sought, among other things, an injunction enjoining the consummation of the Merger. On December 12, 2012, Tony Moss commenced a putative class action in the Delaware Court against Defendants on behalf of himself and all of BMTIpublic stockholders, styled Moss v. Lynch, et al., C.A. No. 8098-VCN (the Moss Action), alleging, among other things, that BMTI and the Board breached their fiduciary duties in connection with the Merger Agreement and that the Wright Defendants had aided and abetted such alleged breaches of fiduciary duty. The complaint in the Moss Action sought, among other things, an injunction enjoining the consummation of the Merger (together with the Maiman Action, the Delaware Actions, and together with the Tennessee Actions, the Actions). On December 17, 2012, the Tennessee Court entered an order, among other things, (i) consolidating the Tennessee Actions to form In re BioMimetic Therapeutics, Inc. Consol. Lead Case No. 41593, (ii) appointing lead and liaison counsel for plaintiffs, (iii) authorizing lead and liaison counsel for plaintiffs to coordinate the prosecution of the consolidated action; and (iv) providing for the filing of a consolidated amended complaint. On December 21, 2012, Defendants filed a Form S-4 Registration Statement including a Preliminary Proxy Statement (the Preliminary Proxy) with the U.S. Securities and Exchange Commission (SEC) disclosing the Board recommendation that the Company stockholders vote in favor of the Merger. On December 27, 2012, the Delaware Court entered an order, among other things, (i) consolidating the Delaware Actions to form In re BioMimetic Therapeutics, Inc. Sholders Litig., Consol. Case No. 8053-VCN, appointing co-lead counsel for plaintiffs and authorizing co-lead counsel for plaintiffs to coordinate the prosecution of the consolidated action. On January 29, 2013, plaintiffs in the Tennessee Action filed a Consolidated Amended Complaint (the Consolidated Complaint) on behalf of themselves and all others similarly situated against Defendants. The Amended Complaint alleged that the Board breached its fiduciary duties to BMTI public stockholders by, among other things, agreeing to the Merger for allegedly insufficient consideration, agreeing to allegedly buyer-friendly deal protection measures in the Merger Agreement, engaging in negotiations compromised by alleged insider conflicts, and by filing a Preliminary Proxy that failed to provide material information that would enable the stockholders to make an informed decision to accept or reject the Merger. The Consolidated Complaint also alleged that BMTI and the Wright Defendants aided and abetted the Board breaches of its fiduciary duties. The Consolidated Complaint sought, among other things, a court order enjoining the Merger based on, among other things, the allegations that the Preliminary Proxy failed to provide material information to BMTI public stockholders. Plaintiffs in the Actions (collectively, Plaintiffs) have conducted a detailed review and analysis of the Preliminary Proxy, the Final Proxy, other publicly available documents, and certain non-public documents produced by BMTI, and have conferred with a financial expert. Counsel for Plaintiffs in the Actions (Plaintiffs Counsel) and counsel for Defendants in the Actions (Defendants Counsel) engaged in discussions regarding Plaintiffs claims in the Actions and Plaintiffs demands for further disclosure to BMTI stockholders through an amendment to the Final Proxy. Plaintiffs Counsel and Defendants Counsel have engaged in arm-length discussions and negotiations regarding a potential resolution of the claims asserted in the Actions. On February 12, 2013, the Parties executed a binding memorandum of understanding (the MOU) containing the terms of the Parties agreement in principle to resolve the Actions. Among other things, the MOU set forth the Parties agreement in principle that, in consideration of the full and final settlement and dismissal with prejudice of the Actions, as well as the release of any and all Released Claims (defined below), BMTI would make certain supplemental disclosures relating to the Merger in an appropriate filing with the SEC, which disclosures provided a substantial benefit to BMTI shareholders. Those disclosures were appended to the MOU as Exhibits A-1 and A-2 (the Supplemental Disclosures) and were filed with the SEC on February 12, 2013. The MOU also provided Plaintiffs with a right to take confirmatory discovery. On February 26, 2013, the holders of at least a majority of BMTI outstanding common stock voted in favor of the adoption of the Merger Agreement and on March 1, 2013, the Merger was consummated. In negotiating and evaluating the terms of the MOU and this Stipulation, the Parties recognized the time and expense that would be incurred by further litigation and the uncertainties inherent in such litigation. Based upon their evaluation, the Parties have concluded that the terms contained in the MOU and this Stipulation are fair and confer a substantial benefit on BMTI stockholders and Class Members. The Parties, therefore, agree that it is desirable and beneficial to them that the Actions be settled in the manner and upon the terms and conditions set forth in the Stipulation. Defendants acknowledge that they considered the disclosure and other claims raised by Plaintiffs in the Actions in determining to make the Supplemental Disclosures, as detailed herein, and that the claims asserted by Plaintiffs in the Actions, the efforts of Plaintiffs Counsel in prosecuting the Actions and the negotiations with Plaintiffs Counsel in the Actions were the sole cause of the dissemination of the Supplemental Disclosures.’