A Delaware state court jury awarded $250 million last month to Appriva Medical Inc. shareholders who were claiming that medical company ev3 Inc. and private equity backer Warburg Pincus had refused to make $175 million in milestone payments ev3 had promised when it bought Appriva and its groundbreaking stroke-prevention technology. The jury found that ev3 had never planned to make good on the promised payments, as reflected by internal documents from April 2003 showing the Minnesota company had never had them on the books. The jury found further that ev3 didn’t act in good faith when pursuing the milestones, breaking the stated terms of its merger agreement.
In April 2009, Appriva shareholders sued ev3, claiming breach of contract, fraud and other allegations. The lawsuit sought damages in accordance with the companies’ merger agreement. During the trial, lawyers for the plaintiffs showed through ev3’s internal documents that the company had never intended to distribute any of the promised milestone payments.
The jury found that ev3 had breached its 2002 merger agreement and that the Appriva shareholders were entitled to all the promised milestone payments related to the development of the device. In addition to the $175 million in milestone payments, the jury awarded the Plaintiffs an additional $75 million to $80 million in interest payments dating back to 2005.
Source: Insurance Journal
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