FK Clients Announce Favorable Settlement of Merrimack Convertible Note Litigation
Friedman Kaplan clients Wells Fargo Bank, N.A., in its capacity as indenture trustee, Wolverine Flagship Fund Trading Limited, 1992 MSF International Ltd., and 1992 Tactical Credit Master Fund, L.P. reached a settlement this week favorably resolving their claims. This includes claims brought by the holders of a majority of the outstanding convertible notes of Merrimack Pharmaceuticals, Inc., and claims brought by the indenture trustee. The case, captioned Wells Fargo Bank, N.A., et. al. v. Merrimack Pharmaceuticals, Inc., was set for trial next month in Delaware Chancery Court.
The noteholder plaintiffs sought to redeem their bonds following the sale this year by Merrimack of certain assets, including all assets related to Merrimack’s only commercial revenue-generating product, the oncology drug ONIVYDE, to Ipsen S.A. Plaintiffs asserted that under the governing indentures, the sale constituted a fundamental change which triggered the right of all noteholders to “put” as many of their notes as they wished to Merrimack for a cash payment at par, plus accrued and unpaid interest, and fees and costs.
Merrimack has agreed to pay the noteholder plaintiffs $0.90 per $1.00 of convertible bonds, plus accrued and unpaid interest, as well as an amount towards plaintiffs’ professional fees. The company will also commence a tender offer to repurchase the convertible notes from all other holders, on the same terms. Further information concerning the settlement can be found in Merrimack’s report on Form 8-K, filed today with the SEC.
“We are extremely pleased with the result of the litigation. We feel that it is highly favorable, not only for our clients the noteholder plaintiffs and the indenture trustee, but for all holders of the convertible bonds,” said Friedman Kaplan partner and counsel to the plaintiffs, Scott Berman.