Solta Medical Inc
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Solta Medical 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 December 16, 2013, Valeant Pharmaceuticals International, Inc. (Valeant) and Solta Medical, Inc. (Solta) announced that they had entered into an Agreement and Plan of Merger, dated as of December 15, 2013, providing for the acquisition of Solta by Valeant (the Merger Agreement). The Merger Agreement was entered into by and among, Valeant, Valeant Pharmaceuticals International (VPI), a wholly-owned subsidiary of Valeant, Sapphire Subsidiary Corp. (Sapphire), a wholly-owned subsidiary of VPI, and Solta. A copy of the Merger Agreement was filed with the United States Securities and Exchange Commission (the SEC) on December 17, 2013. Pursuant to the Merger Agreement, Sapphire commenced a cash tender offer on December 23, 2013 to acquire all shares of Solta common stock for $2.92 per share (the Offer). The Merger Agreement further provided that, following the consummation of the Offer, subject to customary conditions, Sapphire would be merged with and into Solta, with Solta becoming a wholly-owned subsidiary of VPI (the Merger,and collectively with the Offer, the Proposed Transaction). On December 17, 2013, plaintiff Timothy Rosier (Rosier), a purported stockholder of Solta, filed his Verified Class Action Complaint in this Court, in an action captioned Rosier v. Solta Medical, Inc., et al., C.A. No. 9170-CS (the Rosier Action), on behalf of himself and the public stockholders of Solta, challenging the Proposed Transaction and asserting claims against Solta, the members of its board of directors (the Director Defendants, and with Solta, the Solta Defendants), Valeant, VPI and Sapphire (collectively, the Valeant Defendants, and with the Solta Defendants, the Defendants). On December 18, 2013, plaintiff Martha Lathrop, a purported stockholder of Solta, filed a Class Action Complaint in the Superior Court of California for the County of Alameda (the California Court), in an action captioned Lathrop v. Covert, Case No. HG13-707363 (the Lathrop Action), on behalf of herself and the public stockholders of Solta, challenging the Proposed Transaction and asserting claims against the Defendants. On December 20, 2013, plaintiff Hope Walter, a purported stockholder of Solta, filed a Class Action Complaint in the California Court, in an action captioned Walter v. Solta Medical, Inc., Case No. RG13-707659 (the Walter Action), on behalf of herself and the public stockholders of Solta, challenging the Proposed Transaction and asserting claims against the Defendants. On December 23, 2013, Solta filed with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 (the 14D-9), which, among other things, summarized the Merger Agreement and provided an account of the events leading up to the execution of the Merger Agreement and a summary of the valuation analyses conducted by Piper Jaffray & Co. (Piper Jaffray), the financial advisor to Solta board of directors. On December 23, 2013, Valeant filed a Tender Offer Statement on Schedule TO with the SEC (the Schedule TO) that contained an Offer to Purchase for Cash All Outstanding Shares of Common Stock of Solta by the Valeant Defendants. The Valeant Defendants and the Solta Defendants filed their answers to the complaint in the Rosier Action on December 23, 2013. On December 24, 2013, the plaintiff in the Rosier Action served a First Request for the Production of Documents and Things to All Defendants and also served a Subpoena Duces Tecum and Ad Testificandum on Piper Jaffray. On December 24, 2013, Sharon Frady Gurley (Gurley, together with Rosier, the Delaware Plaintiffs), a purported stockholder of Solta, filed her Verified Class Action Complaint for Breach of Fiduciary Duty in this Court, in an action captioned Gurley v. Solta Medical, Inc., et al., C.A. No. 9201-CS (the Gurley Action), on behalf of herself and the public stockholders of Solta and asserting claims against Defendants. On December 24, 2013, plaintiff Stephen Bushansky, a purported stockholder of Solta, filed a Class Action Complaint in the California Court, in an action captioned Bushansky v. Solta Medical, Inc., Case No. RG13-707997 (the Bushansky Action), on behalf of himself and the public stockholders of Solta, challenging the Proposed Transaction and asserting claims against the Defendants. The Lathrop Action, Walter Action and Bushansky Action collectively are referred to as the California Actions, and the Delaware Action and the California Actions together are referred to as the Actions. On December 26, 2013, plaintiffs in the Walter Action filed a Class Action Amended Complaint. On December 27, 2013, the Valeant Defendants filed their answer to the complaint in the Gurley Action. Also on December 27, 2013, the Court granted an Order of Consolidation and Appointment of Co-Lead Counsel consolidating the Rosier Action and the Gurley Action into the Delaware Action. Also on December 27, 2013, plaintiffs in the California Actions (the California Plaintiffs, together with the Delaware Plaintiffs, the Plaintiffs) agreed to defer to proceedings in the Delaware Action through the closing of the Offer in exchange for access to any discovery produced in the Delaware Action. On December 30, 2013, the Court granted a Stipulation and Order for the Production and Exchange of Confidential and Highly Confidential Information. Also on December 30, 2013, the Delaware Plaintiffs filed a Consolidated Verified Amended Class Action Complaint (the Complaint). The Complaint alleges that, among other things, the Director Defendants breached their fiduciary duties in connection with the Proposed Transaction because they failed to secure the best available value for Solta stockholders, engaged in an inadequate process, and because the disclosures in the 14D-9 concerning the Proposed Transaction were materially misleading and incomplete, and that Solta, Valeant, VPI and Sapphire aided and abetted such breaches of fiduciary duty. Between December 30, 2013 and January 9, 2014, counsel for the Plaintiffs in the Actions (Plaintiffs Counsel) conducted expedited discovery relevant to the claims asserted in the Actions that included a review of over 7,000 pages of non-public documents from the Solta Defendants, as well as the depositions of Mark M. Sieczkarek, Chairman and Chief Executive Officer of Solta, on January 9, 2014, and Robert Anderson, a Principal at Piper Jaffray, on January 9, 2014. The Delaware Plaintiffs filed a Motion for Preliminary Injunction and supporting briefing and evidentiary support in the Delaware Action on January 10, 2014. Plaintiffs engaged and consulted with financial experts in connection with their prosecution of the Actions and their assessment of the claims set forth therein and the potential resolution of those claims. Counsel for the parties to the Actions engaged in arm-length discussions and negotiations concerning a possible settlement of the Actions. Plaintiffs in each of the Actions represent to have owned at all relevant times and continued to own shares of Solta common stock through the consummation of the Proposed Transaction, for which proof of ownership was provided to Defendants counsel. After arm-length negotiations, counsel to the parties in the Actions reached an agreement-in-principle concerning the proposed settlement of the Actions. Those extensive negotiations and discussions led to the execution of a memorandum of understanding (the MOU) on January 11, 2014. The MOU provided for an agreement in principle to settle the Actions (the Settlement), subject to additional confirmatory discovery and approval of the Court, on the basis of the inclusion of additional disclosures in a new Schedule 14D-9 in the form attached hereto as Exhibit A, which was filed with the SEC on January 13, 2014. On January 13, 2014, the parties notified the Court of the MOU and of Plaintiffs intention to conduct confirmatory discovery relating to the proposed Settlement. On January 13, 2014, the Delaware Plaintiffs withdrew their Motion for a Preliminary Injunction. On January 23, 2014 the Proposed Transaction was consummated. Following the execution of the MOU, and as contemplated therein, Plaintiffs Counsel conducted a further investigation of the facts and circumstances underlying the claims asserted in the Actions, which included, among other things, reviewing and analyzing additional documents produced by Defendants and conducting the deposition of Eric Stang, one of Solta independent directors and the chairman of its Technology Committee, on April 22, 2014.’