Hi-Tech Pharmacal Co., Inc.
Hi-Tech Pharmacal Co., 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 August 26, 2013, Hi-Tech entered into an Agreement and Plan of Merger (the Merger Agreement) with Akorn, Inc. and Akorn, Inc. wholly-owned subsidiary, Akorn Enterprises, Inc. (collectively, Akorn) pursuant to which Akorn agreed to purchase Hi-Tech for $43.50 per share in cash for each outstanding share of Hi-Tech (the Merger). Following the announcement of the Merger, two putative class-action lawsuits challenging the Merger were filed, both of which the parties agree arise from the same set of operative facts and involve the same putative class: the first, captioned Karant v. Hi-Tech Pharmacal Co., Inc., et al., C.A. No. 8854-VCP, was filed in the Court of Chancery of the State of Delaware on August 30, 2013 (the Delaware Action), and a second, captioned Wackstein v. Hi-Tech Pharmacal Co., Inc., et al, index no. 063450/2013, was filed in the New York State Supreme Court in the County of Suffolk on October 18, 2013 (the New York Action, and together with the Delaware Action, the Actions). On September 24, 2013, Hi-Tech filed its Preliminary Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934. On October 2, 2013, Plaintiff in the Delaware Action filed a Verified Amended Class Action Complaint alleging, among other things, that the Individual Defendants had breached their fiduciary duties in connection with the consideration and approval of the Merger and disclosures related thereto, that the disclosures made to Hi-Tech stockholders in connection with the Merger were materially incomplete and/or misleading, and that Akorn had aided and abetted those breaches of fiduciary duty. On October 9, 2013, Plaintiff in the Delaware Action served his first request for the production of documents. On November 6, 2013, the parties in the Delaware Action filed a Stipulated and [Proposed] Scheduling Order Regarding Expedited Proceedings, and the Court of Chancery entered that Order on November 6, 2013. completed their expedited production of documents on November 6, 2013, resulting in a production of over 90,000 pages from the Individual Defendants, Hi-Tech and Nomura Securities International, Inc. (Nomura). Between November 14, 2013 and November 15, 2013, Plaintiff in the Delaware Action took the depositions of David Seltzer (CEO of Hi-Tech), Jack van Hulst (member of the board of directors of Hi-Tech), and Jason Fertig (managing director at Nomura). A Motion for Preliminary Injunction in the Delaware Action was scheduled for hearing on December 12, 2013. Plaintiffs Counsel and Defendants Counsel engaged in extensive arm-length negotiations concerning Plaintiffs demands for further disclosure to Hi-Tech stockholders and a possible settlement of the Actions. On November 26, 2013, the parties reached an agreement-in-principle to fully and finally resolve the Actions, subject to approval of the Court (the Settlement), and Defendants Counsel and Plaintiffs Counsel in the Actions entered into a Memorandum of Understanding (MOU) setting forth that agreement-in-principle. The MOU provided, among other things, that Hi-Tech would issue additional disclosures set forth in Supplemental Proxy Materials (the Supplement) to be filed with the Securities and Exchange Commission (SEC) no later than December 2, 2013. On November 26, 2013, the Parties informed the Court of their agreement-in-principle to resolve the Delaware Action on the terms and subject to the conditions set forth in the MOU submitted simultaneously to this Court. On November 27, 2013 Hi-Tech caused the Supplement to be filed with the SEC.’