Patient Safety Technologies, Inc.
Patient Safety Technologies, 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 this lawsuit: ‘into a Merger Agreement, pursuant to which Stryker Corporation (‘Stryker’) and PS Merger Sub (‘Merger Sub’) would acquire each share of common stock of Patient Safety for $2.22 cash per share (the ‘Merger’). In connection with its proposed meeting of stockholder, Patient Safety filed a Schedule 14A Definitive Proxy Statement (the ‘Proxy’) with the U.S. Securities and Exchange Commission (the ‘SEC’) on February 25,2014. Following the announcement of the Merger, on January 13, 2014, stockholder John Hofman filed a class action lawsuit in the Court entitled Hofman v. Patient Safety Technologies, Inc. et al., Case No. 30-2014-00698513-CU-SL-CXC. Plaintiff Hofman later filed an amended complaint on January 29, 2014 (the ‘Amended Complaint’). On January 22, 2014, Plaintiff Ryan Martinsen filed a class action lawsuit in the Court entitled Martinsen v. Patient Safety Technologies, Inc. et al., Case No. 30-2014-00701480-CU-SLCXC. On February 13, 2014, Plaintiff Gerald Haas filed a class action lawsuit in the Court entitled Haas v. Patient Safety Technologies, Inc. eta!., Case No. 30-2014-00705803-CU-SL-CXC (the Hofman, Martinsen, and Haas actions collectively are referred to herein as the ‘California Actions’). On February 25, 2014, Plaintiff Donald Gregor filed a class action lawsuit in the Court of Chancery of the State of Delaware entitled Gregor v. Patient Safety Technologies, Inc. et al., Case No. 9395-VCP (the ‘Delaware Action,’ and, together with the California Actions, the ‘Actions’). On March 10, 2014, the Court consolidated the California Actions under the caption In re Patient Safety Technologies, Inc. S’holder Litig., Lead Case No. 30-2014-00698513-CU-SL-CXC. During the discovery phase, Defendants produced and Plaintiffs reviewed approximately 2,500 pages of confidential non-public documents, including presentations to the board of directors by its financial advisor, Bank of America Merrill Lynch (‘BAML”), board presentations prepared by Patient Safety management in connection with the consideration of strategic alternatives during the relevant time period, and BAML’s retainer agreement; in addition to reviewing thousands of pages of publicly available documents, including Patient Safety’s SEC filings, trading history and news reports. On March 4, 2014, Plaintiffs’ Counsel took the deposition of Patient Safety’s Chief Executive Officer Brian Stewart. On March 6, 2014, Plaintiffs’ Counsel took the deposition of a representative of Bank of America Merrill Lynch, financial adviser to Patient Safety in connection with the Merger. Plaintiffs’ Counsel and counsel for Defendants in the Actions engaged in extensive arm’s length negotiations concerning Plaintiffs’ demands for further disclosure to Patient Safety stockholders and a possible settlement of the Actions. As a result of such negotiations, on March 11, 2014, the Parties hereto entered into a Memorandum of Understanding (the ‘MOU’) containing the terms for the Parties’ agreement-in-principle to resolve the Actions. Among other things, the MOU sets forth the Parties’ agreement-in-principle that, in consideration for the full and final settlement and dismissal with prejudice of the Actions and the release of any and all Released Claims, Defendants would make additional disclosures (the ‘Disclosures’) in an 8-K to be filed with the SEC as soon as practicable. A copy of the 8-K showing the Disclosures to which the Parties agreed in settlement of the Actions is attached hereto as Exhibit A. Plaintiffs’ Counsel proposed, reviewed, commented on and approved the Disclosures. On March 21, 2014, at a special meeting of Patient Safety’s stockholders, the stockholders voted to adopt the Merger, which was thereafter consummated on March 24, 2014. Discovery is now complete, and Plaintiffs have confirmed the fairness, adequacy, and reasonableness of the Settlement.