UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): January 9, 2015
Dendreon Corporation
(Exact Name of Registrant as Specified in Its Charter)
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Delaware |
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001-35546 |
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22-3203193 |
(State or Other Jurisdiction
of Incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
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601 Union Street, Suite 4900,
Seattle, Washington |
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98101 |
(Address of Principal Executive Offices) |
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(Zip Code) |
Registrants telephone number, including area code: (888) 369-8915
1301 2nd Avenue, Seattle, Washington 98101
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 8.01. Other Events Settlement of Certain Litigation.
On November 6, 2014, Dendreon Corporation (the Company) entered into a stipulation to settle certain stockholder class action
and derivative litigation, subject to court approval. On January 16, 2015, the Delaware Court of Chancery entered an order that, among other things, scheduled a hearing on the proposed settlement for March 30, 2015 at 2:00 p.m. in
Wilmington, Delaware and directed that notice of that hearing be given to stockholders, including by the filing of a Current Report on Form 8-K (Form 8-K). On January 22, 2015, the Company filed a Form 8-K reporting those
developments, but the Form 8-K failed to attach the Notice of Pendency of Settlement of Action (the Notice). A copy of the Notice is filed as Exhibit 99.1 hereto. A copy of the Stipulation of Settlement, and its exhibits, is filed as
Exhibit 99.2 hereto and is available on the Companys website at:
http://files.shareholder.com/downloads/DNDN/3283801063x0x804398/1AC8F43F-0DD4-4ED7-8964-10173437457E/0545_001.pdf.
Cautionary Statements Regarding the Chapter 11 Cases
The Companys securityholders are cautioned that trading in the Companys securities during the pendency of the Companys
Chapter 11 cases will be highly speculative and will pose substantial risks. Trading prices for the Companys securities may bear little or no relationship to the actual recovery, if any, by holders thereof in the Companys Chapter 11
cases. Accordingly, the Company urges extreme caution with respect to existing and future investments in its securities. The United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court) has entered an order that
places limitations on trading in the Companys common stock, including options and certain other rights to acquire common stock, and certain instruments convertible into common stock, during the pendency of the bankruptcy proceedings.
A plan of liquidation will likely result in holders of the Companys capital stock receiving no distribution on account of their
interests and cancellation of their existing stock. If certain requirements of Chapter 11 of Title 11 of the United States Code are met, a Chapter 11 plan can be confirmed notwithstanding its rejection by the Companys equity
securityholders and notwithstanding the fact that such equity securityholders do not receive or retain any property on account of their equity interests under the plan. The purchase price paid in connection with the closing of the sale of
substantially all of the Companys assets (the Sale Transaction) to Drone Acquisition Sub Inc., a wholly-owned direct subsidiary of Valeant Pharmaceuticals International, Inc., does not exceed the Companys prepetition
obligations to creditors, and therefore subsequent liquidation under a Chapter 11 plan would provide no recovery for the Companys equity securityholders.
Cautionary Statement Regarding Forward-Looking Statements
Certain information in this Current Report on Form 8-K and the exhibits attached hereto (collectively, this Current Report) may
constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Current Report that are not statements of historical fact, including estimates, projections, future
trends and the outcome of events that have not yet occurred referenced in this Current Report should be considered forward-looking statements. Words such as anticipate, estimate, expect, project,
intend, plan, believe, may, predict, will, would, could, should, target and similar expressions are often used to identify
forward-looking statements. Actual results or events could differ materially from those indicated in forward-looking statements as a result of risks and uncertainties, including, among others, the potential adverse impact of the Chapter 11 cases on
the Companys liquidity or results of operations, changes in the Companys ability to meet financial obligations during the Chapter 11 process or to maintain contracts that are critical to the Companys
wind-down of its affairs, the outcome or timing of the Chapter 11 process, the effect of the Chapter 11 cases or the Sale Transaction on the Companys relationships with third parties, regulatory
authorities and employees in connection with the Companys wind-down of its affairs, proceedings that may be brought by third parties in connection with the Chapter 11 process, the ability of the Company
to fund the wind-down of its affairs and the timing or amount of any distributions to the Companys stakeholders. For a discussion of some of the additional risks and important factors that the Company believes could cause actual results or
events to differ from the forward-looking statements that it makes, see the sections entitled Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations in the Companys
Quarterly Report on Form 10-Q for the quarter ended September 30, 2014. In addition, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its
actual results or events to differ from those contained in any forward-looking statements. Accordingly, you should not place undue reliance on any forward-looking statements contained in this Current Report.
Any forward-looking statements speak only as of the date of this Current Report. The Company undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.
Additional Information Regarding the Chapter 11 Cases
Information about the Chapter 11 process, as well as court filings and other documents related to the reorganization proceedings, is available
through the Companys claims agent, Prime Clerk, at https://cases.primeclerk.com/dendreon or 844-794-3479. Information contained on, or that can be accessed through, such web site or the Bankruptcy Courts web site is not part of this
Current Report.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits:
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99.1 |
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Notice of Pendency of Settlement of Action, as approved by the Delaware Court of Chancery on January 16, 2015. |
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99.2 |
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Stipulation of Compromise and Settlement, entered November 6, 2014. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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DENDREON CORPORATION |
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By: |
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/s/ Robert L. Crotty |
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Name: |
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Robert L. Crotty |
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Title: |
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President, General Counsel |
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and Secretary |
Date: March 6, 2015
INDEX TO EXHIBITS
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Exhibit No. |
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Description |
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99.1 |
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Notice of Pendency of Settlement of Action, as approved by the Delaware Court of Chancery on January 16, 2015. |
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99.2 |
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Stipulation of Compromise and Settlement, entered November 6, 2014. |
Exhibit 99.1
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
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HERBERT SILVERBERG, Derivatively |
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on Behalf of DENDREON |
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CORPORATION, |
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) |
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Plaintiff, |
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v. |
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C.A. No. 7646-VCP |
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MITCHELL H. GOLD, RICHARD F. |
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) |
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HAMM, GREGORY T. SCHIFFMAN, |
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MARK W. FROHLICH, SUSAN B. |
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BAYH, RICHARD B. BREWER, |
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GERARDO CANET, BOGDAN |
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DZIURZYNSKI, DAVID L. URDAL, and |
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DOUGLAS G. WATSON, |
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Defendants, |
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-and- |
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DENDREON CORPORATION, |
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Nominal Defendant. |
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NOTICE OF PENDENCY OF SETTLEMENT OF ACTION
TO: ALL CURRENT STOCKHOLDERS OF DENDREON CORPORATION
(TRADING SYMBOL: DNDN)
PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR RIGHTS WILL BE AFFECTED BY THE LEGAL PROCEEDINGS IN THIS LITIGATION. IF THE
COURT APPROVES THE PROPOSED SETTLEMENT, YOU WILL BE FOREVER BARRED FROM CONTESTING THE FAIRNESS, REASONABLENESS, AND ADEQUACY OF THE PROPOSED SETTLEMENT, OR PURSUING THE CLAIMS DEFINED HEREIN.
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IF YOU HOLD DENDREON CORPORATION COMMON STOCK FOR THE BENEFIT OF ANOTHER, PLEASE PROMPTLY
TRANSMIT THIS DOCUMENT TO SUCH BENEFICIAL OWNER.
IF YOU DO NOT OBJECT TO THE PROPOSED SETTLEMENT OR ATTORNEYS FEE AND
EXPENSE AWARD DESCRIBED IN THIS NOTICE, YOU ARE NOT OBLIGATED TO TAKE ANY ACTION.
I. |
WHY ARE YOU RECEIVING THIS NOTICE? |
The purpose of this Notice
is to tell you about: (i) lawsuits (the Actions) in the Delaware Court of Chancery (the Delaware Court), the Superior Court of Washington (the Washington Court) and in the United States District Court for the
Western District of Washington (the Federal Court) brought on behalf of Dendreon Corporation (Dendreon or the Company); (ii) a proposal to settle the Actions as provided in a Stipulation of Compromise and
Settlement (the Stipulation); and (iii) your right, among other things, to attend and participate in a hearing to be held on March 30, 2015 at 2:00 p.m., in the Court of Chancery, New Castle County Courthouse, 500 North King
Street, Wilmington, Delaware 19801 (the Settlement Hearing).
This Notice describes the rights you may have
under the Stipulation and what steps you may, but are not required to, take concerning the proposed settlement. If the Court approves the Stipulation, the parties will ask the Delaware Court to approve an Order and Final Judgment that would end the
Actions.
THE FOLLOWING DESCRIPTION DOES NOT CONSTITUTE FINDINGS OF ANY COURT. IT IS BASED ON STATEMENTS OF THE PARTIES
AND SHOULD NOT BE UNDERSTOOD AS AN EXPRESSION OF ANY OPINION OF ANY COURT AS TO THE MERITS OF ANY OF THE CLAIMS OR DEFENSES RAISED BY ANY OF THE PARTIES.
II. |
BACKGROUND: WHAT ARE THE ACTIONS ABOUT? |
Summary of the Delaware Action
On September 13, 2011, Plaintiff Herbert Silverberg (Plaintiff Silverberg) made a demand for books and records from Dendreon
pursuant to Section 220 of the Delaware General Corporation Law. After extensive negotiations, on or about
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January 23, 2012, Dendreon produced several hundred pages of documents.
On
June 22, 2012, Plaintiff Silverberg filed the a derivative action complaint in the Delaware Court (the Delaware Action) in the Court derivatively on behalf of Dendreon against defendants Gold, Hamm, Schiffman, Frohlich, Bayh, Canet,
Dziurzynski, Urdal and Watson (the Delaware Defendants). Plaintiff Silverberg claimed that the Delaware Defendants breached their fiduciary duties of loyalty in connection with certain transactions in Dendreon securities, including sales
of Dendreon stock.
On November 14, 2012, pursuant to a stipulation of the parties to the Delaware Action, the Court entered an Order
temporarily staying the Delaware Action until January 22, 2013 so that the parties could explore a possible resolution.
On
February 21, 2013, the Delaware Defendants filed a motion to stay the Delaware Action pending resolution of the securities class action entitled In re Dendreon Corporation Class Action Litigation, No. 11 Civ. 1219 (JLR) (W.D. Wash.)
(the Federal Securities Class Action). On February 22, 2013, the Delaware Defendants filed a motion to dismiss Plaintiff Silverbergs Derivative Action Complaint (the Delaware Complaint). On April 17, 2013, the
Delaware Court issued a bench ruling granting in part and denying in part the Delaware Defendants motion to stay, ruling that briefing of the Delaware Defendants motion to dismiss should proceed.
On May 17, 2013, the Delaware Defendants filed their opening brief in support of their motion to dismiss the Delaware Complaint. Briefing
of the Delaware Defendants motion to dismiss was completed by July 2, 2013 and oral argument was held before the Delaware Court on September 10, 2013. (By the time of the argument, a settlement of the Federal Securities Class Action
had been reached and approved.) On December 31, 2013, the Court issued an opinion (the Opinion) denying the motion to dismiss the Delaware Complaint.
On January 7, 2014, Plaintiff Silverberg served the first set of document requests upon the Delaware Defendants.
On January 10, 2014, Plaintiff Silverberg filed a motion to set a schedule in the Delaware Action. Also, on January 10, 2014, the
Delaware Defendants filed an application for certification of interlocutory review of the Opinion.
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On January 15, 2014, the Delaware Defendants filed a renewed motion to stay the Delaware
Action pending resolution of an individual securities opt-out action entitled Bolling v. Dendreon Corporation, No. 13 Civ. 872 (JLR) (W.D. Wash.).
On February 4, 2014, the Court issued an opinion denying the Delaware Defendants application for certification of interlocutory
appeal. On February 12, 2014, the Delaware Supreme Court issued an order declining to hear the Delaware Defendants interlocutory appeal.
On March 17, 2014, the Court held oral argument on Plaintiff Silverbergs motion to set a schedule and the Delaware Defendants
renewed motion to stay. The Court issued a bench ruling granting Plaintiff Silverbergs motion to set a schedule with modifications and instructed the parties to confer and submit a proposed schedule consistent with the Courts bench
ruling. The Court additionally denied the Delaware Defendants renewed motion to stay.
On April 28, 2014, the Court entered a
schedule permitting the parties to the Delaware Action to proceed with full discovery and setting trial to commence on March 16, 2015.
Plaintiff Silverberg served a total of four sets of document requests and three sets of interrogatories on each of the Delaware Defendants,
and also sought discovery through subpoenas duces tecum and ad testificandum served on several third-party witnesses.
The
parties to the Delaware Action represent that they diligently met and conferred several times concerning the scope of discovery, and exchanged correspondence regarding, among other things: (i) the nature and scope of document production;
(ii) disagreements as to permissible discovery; and (iii) the depositions of fact witnesses.
Plaintiff Silverberg represents
that, in response to discovery requests, beginning on March 21, 2014, the Delaware Defendants produced in excess of 280,000 pages of documents and responses to the three sets of interrogatories propounded by Plaintiff Silverberg. Additionally,
Plaintiff Silverberg represents that he produced documents and information responsive to the Delaware Defendants document requests and interrogatories. Plaintiff Silverberg represents that, at the time of the Parties initial agreement to
enter into this Settlement, the parties to the Delaware Action had scheduled the deposition of two facts witnesses
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and were firming up the deposition dates for an additional twelve Dendreon fact witnesses. In addition, Plaintiff Silverberg represents that he anticipated the need for depositions of third-parties after having an opportunity to analyze their document productions.
Summary of the Washington Federal
Action
On August 12, 2011, Plaintiff William Wagner filed an action in the United States District Court for the Western District
of Washington against certain current and former officers and directors of Dendreon (the Washington Federal Action). Plaintiffs Fang Liu, Paula Nicholas and Jared Ross (collectively with Wagner the Washington Federal
Plaintiffs) subsequently filed actions in that federal court as well.
On September 22, 2011, Plaintiffs Wagner and Nicholas
filed a joint motion to transfer their cases to a single judge, consolidate and appoint lead plaintiffs and counsel.
On November 22,
2011, the Washington Federal Plaintiffs stipulated to a stay of proceedings in the Washington Federal Action pending a decision on the motion to dismiss in the Federal Securities Class Action.
On December 1, 2011, Judge James L. Robart entered the Washington Federal Plaintiffs proposed order of consolidation and
appointment of lead plaintiff and lead and liaison counsel. Judge Robart additionally entered the stipulated stay of proceedings as agreed upon by the parties to the Washington Federal Action.
Dendreon provided the Washington Federal Plaintiffs with several hundred pages of documents previously provided to Plaintiff Silverberg
pursuant to the Delaware Plaintiffs books and records demand.
On June 24, 2014, the Washington Federal Plaintiffs agreed to
the Agreement (as defined below) to resolve the Actions.
Summary of the Washington State Action
On August 26, 2011, Plaintiff James McCallion filed an action in the Superior Court of Washington for King County against certain current
and former officers and directors of Dendreon (the Washington State Action). Plaintiff
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David Wallace (collectively with McCallion the Washington State Plaintiffs) subsequently filed an action in that state court as well.
On September 9, 2011, the Washington State Action was removed to the United States District Court for the Western District of Washington.
On October 18, 2011, pursuant to a stipulation between certain parties to the Washington State Action, the action was remanded back to Washington State Court.
On November 7, 2011, the Washington State Plaintiffs filed a stipulation seeking a stay pending a decision on the motion to dismiss in
the Federal Securities Class Action. The stipulation additionally sought consolidation of the related actions and appointment of co-lead and liaison counsel. On November 15, 2011, Judge Laura Inveen ordered the requested stay, consolidation and
appointment of co-lead and liaison counsel.
Dendreon provided the Washington State Plaintiffs with several hundred pages of documents
previously provided to Plaintiff Silverberg pursuant to the Delaware Plaintiffs books and records demand.
On June 24, 2014,
the Washington State Plaintiffs agreed to the Agreement (as defined below) to resolve the Actions.
III. |
DENDREON BANKRUPTCY PETITION |
On November 10, 2014, Dendreon filed a
voluntary position for bankruptcy in the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court). On December 17, 2014, the Bankruptcy Court issued an order approving the Stipulation as a reasonable
exercise of the Debtors business judgment (the Bankruptcy Order), and authorizing the Debtors to take all actions necessary to implement the Stipulation, subject to certain clarifications set forth in the Bankruptcy Order (which
are discussed below).
IV. |
HOW WAS THE SETTLEMENT REACHED? |
On January 15 and April 26, 2013, the
parties to the Actions participated in mediation sessions with Judge Layn R. Phillips (Ret.) during which the parties were unable to agree to a resolution.
On May 13, 2014, the parties participated in another mediation session with Judge Phillips in New York City. Although the parties did not
agree to settle the
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Actions on that date, the parties, through Judge Phillips, thereafter continued to discuss the possibility of settlement.
On June 24, 2014, following a mediators recommendation issued by Judge Phillips, the Parties agreed in principle to settle the
Actions on certain terms (the Agreement), subject to definitive documentation and court approval. On July 18, 2014, the parties entered into a Memorandum of Understanding setting forth the basic terms of a settlement of the Actions. The
Stipulation was later signed by all parties on November 6, 2014.
THE COURTS HAVE NOT FINALLY DETERMINED THE
MERITS OF PLAINTIFFS CLAIMS OR THE DEFENSES THERETO. THIS NOTICE DOES NOT IMPLY THAT THERE HAS BEEN OR WOULD BE ANY FINDING OF VIOLATION OF THE LAW BY THE DEFENDANTS IN THE ACTIONS OR THAT RECOVERY COULD BE HAD IN ANY AMOUNT IF THE ACTIONS
WERE NOT SETTLED.
V. |
WHAT ARE THE TERMS OF THE SETTLEMENT? |
Under the Stipulation,
Dendreon is to receive the total sum of $4,500,000 less any amount awarded by the Delaware Court to Plaintiffs Counsel for fees and expenses (the Settlement Payment) and is required to institute certain corporate governance
reforms. The Bankruptcy Order clarifies that in the event that the Debtors reorganize as the result of the implementation of a plan of reorganization or liquidation pursuant to which (i) holders of unsecured claims against the Debtors receive
shares of new common stock of the reorganized company, (ii) the existing shares of equity of Dendreon are cancelled; or (iii) the reorganized company is no longer a public entity, the reorganized company shall be under no obligation to
implement or maintain any of the corporate governance measures contemplated by the terms of the Stipulation.
Because the
Actions were brought for the benefit of Dendreon, any recovery in the litigations (whether from this or any settlement or through a judgment in favor of the Plaintiffs) would go to Dendreon. Dendreon stockholders will not receive any direct payment
as a result of the Stipulation and will not need to fill out any kind of claims form as a result of the settlement.
If
the Delaware Court approves the proposed Stipulation, Plaintiffs will then request that the Washington Court and the Federal Court dismiss the respective Actions with prejudice because the Stipulation finally resolves all claims of
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Dendreon against the Released Parties (as defined below) arising out of the facts on which the Actions are based. The Stipulation is contingent on receiving approval from the Delaware Court.
VI. |
WHAT CLAIMS WILL THE SETTLEMENT RELEASE? |
Under the Stipulation, the
following releases will occur, except as noted below:
Plaintiffs (on their own behalves and derivatively on
behalf of Dendreon), Plaintiffs Counsel, Dendreon, and each and every current Dendreon stockholder claiming by, through, in the right of, derivatively, or on behalf of Dendreon, shall fully, finally, and forever release, relinquish, and
discharge the Released Parties (as defined below) from any and all of the Released Claims (as defined below).
Each of the
Released Parties (as defined below) shall fully, finally, and forever release, relinquish, and discharge Plaintiffs, Plaintiffs Counsel, Dendreon, and each and every current Dendreon stockholder claiming by, through, in the right of,
derivatively, or on behalf of Dendreon from any and all claims arising from the institution or prosecution of the Actions.
Pursuant to the Stipulation, the term Released Parties means, as to Dendreon and Mitchell H. Gold, Richard F.
Hamm, Susan B. Bayh, Hans E. Bishop, Richard B. Brewer, Gerardo Canet, Bogdan Dziurzynski, Mark W. Frohlich, Pedro Granadillo, Richard J. Ranieri, Gregory T. Schiffman, David C. Stump, David L. Urdal, and Douglas G. Watson (collectively, the
Individual Defendants), their respective past or present directors, officers, employees, partners, insurers, co-insurers, reinsurers, agents, controlling shareholders, attorneys, accountants, advisors, personal or legal representatives,
predecessors, successors, assigns, parents, subsidiaries, divisions, joint ventures, and each Individual Defendants spouse, domestic partner, parents, siblings, and children; the parents of his or her spouses (all including step and adoptive
relationships); his or her estate and any executor or other fiduciaries of such estate; and any trust of which any of the foregoing is a settler or beneficiary.
Pursuant to the Bankruptcy Order, Dendreon has agreed that, as to Dendreon, the definition of Released Parties in
the Stipulation shall only extend to Dendreons past or present directors, officers, employees, predecessors, successors, assigns, parents, subsidiaries, divisions, and joint ventures, as well as any insurers who advance any portion of the
Settlement Payment.
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Pursuant to the Stipulation, the term Released Claims means, to the
fullest extent allowed by law, all claims for relief (including Unknown Claims), demands, causes of action, rights, potential or actual liabilities of every nature and description, whether known or unknown, whether arising under federal, state,
common or foreign law, for compensatory damages, punitive damages, restitution, disgorgement or any other legal or equitable relief that could be sought under any legal theory, (a) that Plaintiffs asserted in any of the complaints filed in any
of the Actions or proffered for potential filing as an amended pleading in any of the Actions (collectively, the Complaints), or (b) that Plaintiffs, Dendreon, or any Current Dendreon Stockholder could have asserted in any forum
that arise out of, relate to or are based upon the allegations, transactions, facts, matters or occurrences, representations, misrepresentations, or omissions involved, set forth, or referred to in any of the Complaints, including without limitation
allegations relating to transactions in Dendreon securities, the Individual Defendants performance of their duties as officers and/or directors of Dendreon, or any other action taken or alleged to have been taken by the Individual Defendants
as identified in the Complaints, except for claims relating to the enforcement of the Settlement.
Pursuant to the
Bankruptcy Order, Defendants have agreed that (a) the Released Claims shall not include claims arising from facts that occurred after June 22, 2012 and (b) the Debtors release of the Individual Defendants with respect to claims
that could have been asserted related to the Individual Defendants performance of their duties as officers and/or directors of Dendreon extends only to claims that arise out of, relate to or are based upon the allegations, transactions, facts,
matters or occurrences, representations, misrepresentations, or omissions alleged in any of the Complaints.
The
following claims are reserved and not being released as part of the Stipulation:
Each of Dendreon and the Released Persons shall
retain and reserve all of their respective claims or rights that may exist relating to the advancement and payment from Dendreon and/or reimbursement to Dendreon of legal fees and defense costs arising under and pursuant to any Released
Persons respective indemnification agreements with Dendreon, Dendreons certificate of incorporation or by-laws, applicable law, equity or other contract, or any entitlement to insurance coverage or insurance proceeds, and any other
litigation, matter, proceeding, or investigation.
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VII. |
WHAT ARE THE REASONS FOR SETTLING THE ACTIONS? |
Plaintiffs believe that the
claims asserted in the Actions have merit, but also believe that the Settlement set forth below provides substantial and immediate benefits for Dendreon and its current stockholders. In addition to these substantial benefits, Plaintiffs and
Plaintiffs Counsel have considered: (i) the attendant risks of continued litigation and the uncertainty of the outcome of the Actions; (ii) the probability of success on the merits; (iii) the inherent problems of proof
associated with, and possible defenses to, the claims asserted in the Actions; (iv) the desirability of permitting the Settlement to be consummated according to its terms; (v) the expense and length of continued proceedings necessary to
prosecute the Actions against the Individual Defendants through trial and appeals; and (vi) the conclusion of Plaintiffs and Plaintiffs Counsel that the terms and conditions of the Stipulation are fair, reasonable, and adequate, and that
it is in the best interests of Dendreon and its current stockholders to settle the Actions on the terms set forth herein.
Based on
Plaintiffs Counsels thorough review and analysis of the relevant facts, allegations, defenses, and controlling legal principles, Plaintiffs Counsel believe that the Settlement set forth in this Stipulation is fair, reasonable, and
adequate, and confers substantial benefits upon Dendreon and its current stockholders. Based upon Plaintiffs Counsels evaluation, Plaintiffs have determined that the Settlement is in the best interests of Dendreon and its current
stockholders and have agreed to settle the Actions upon the terms and subject to the conditions set forth herein.
The Individual
Defendants deny that they have committed or intended to commit any wrongdoing or violations of law arising out of any of the conduct, statements, acts, or omissions alleged in the Actions, and maintain that their conduct was at all times proper and
in compliance with applicable law. The Individual Defendants who traded in Dendreon stock further deny that they traded Dendreon stock on the basis of material non-public information, breached their fiduciary duties, were unjustly enriched or
committed corporate waste, or made any material misstatements or omissions in Dendreons public filings, press releases, or other public statements. The Individual Defendants also deny that Dendreon was harmed by any conduct of the Individual
Defendants alleged in the Actions or that could have been alleged therein. Each of the Individual Defendants asserts that, at all relevant times, he or she acted in good faith and in a manner he
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or she reasonably believed to be in the best interests of Dendreon and its stockholders.
The Individual Defendants, however, recognize the uncertainty and the risk inherent in any litigation, and the difficulties and substantial
burdens, expense, and length of time that may be necessary to defend this proceeding through the conclusion of discovery, summary judgment motions, trial, post-trial motions, and appeals. The Individual Defendants wish to eliminate the uncertainty,
risk, burden and expense of further litigation, and to permit Dendreon to operate without further distraction and diversion with respect to the Actions. Further, Dendreon acknowledges that the Settlement is fair, reasonable, and adequate, and is in
the best interests of Dendreon and its stakeholders. The Individual Defendants have, therefore, determined to settle the Actions on the terms and conditions set forth in the Stipulation and to put the Released Claims to rest finally and forever,
without in any way acknowledging any wrongdoing, fault, liability, or damages.
VIII. |
HOW WILL THE ATTORNEYS GET PAID? |
To date, Plaintiffs
Counsel have not received any payments for their efforts on behalf of Dendreon and its stockholders. If the Delaware Court approves the Stipulation, Plaintiffs Counsel shall apply to the Delaware Court for an award of attorneys fees and
expenses (the Fee and Expense Application) of no more than $1,125,000 (or 25% of the Settlement Payment) in attorneys fees plus reasonable expenses actually incurred, to be paid from the Settlement Payment. So long as
Plaintiffs application for an award of fees from the Court does not exceed $1,125,000 and a reasonable amount of expenses actually incurred, Defendants shall take no position with respect to Plaintiffs Fee and Expense Application.
Court approval of the Stipulation is not in any way conditioned on the Delaware Court approving the Fee and Expense
Application. Disallowance by the Delaware Court of the Fee and Expense Application, or any portion thereof, any appeal from any order relating thereto, and any modification or reversal on appeal of any such order, will not operate to terminate or
cancel the Stipulation or affect its other terms, including the releases, or affect or delay the finality of the Judgment approving the Stipulation.
All of defendants own legal fees, costs, and expenses incurred in the Actions will be borne by defendants.
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IX. |
WHEN WILL THE SETTLEMENT HEARING TAKE PLACE? |
The Delaware Court
has scheduled a Settlement Hearing to be held on March 30, 2015 at 2:00 p.m., in the Court of Chancery, New Castle County Courthouse, 500 North King Street, Wilmington, Delaware 19801.
The purpose of the Settlement Hearing is to: (i) determine whether the proposed Stipulation is fair, reasonable, and
adequate and in the best interests of Dendreon and its stockholders and should be approved by the Court; (ii) determine whether an Order and Final Judgment should be entered dismissing the Delaware case with prejudice and extinguishing and
releasing all of the claims raised in the Actions against the Released Parties; (iii) determine whether the Delaware Court should approve Plaintiffs Counsels Fee and Expense Application; (iv) hear and determine any objections
to the proposed settlement; and (v) rule on such other matters as the Delaware Court may deem appropriate.
The Court
may adjourn the Settlement Hearing from time to time without further notice to anyone other than the parties to the Actions and any Objectors (as defined below). The Delaware Court reserves the right to approve the Stipulation at or after the
Settlement Hearing with such modifications as may be consented to by the parties to the Stipulation and without further notice.
X. |
DO I HAVE A RIGHT TO APPEAR AND OBJECT? |
Any record or
beneficial stockholder of Dendreon who objects to the settlement, the judgment proposed to be entered or Plaintiffs Counsels Fee and Expense Application, or who otherwise wishes to be heard (an Objector), may appear in person
or by his, her, or its attorney at the Settlement Hearing and present any evidence or argument that may be proper and relevant; provided, however, that no Objector shall be heard or entitled to contest the approval of the terms and
conditions of the Stipulation, or, if approved, the judgment to be entered thereon, unless he, she, or it has, no later than ten (10) business days before the Settlement Hearing (unless the Delaware Court in its discretion shall thereafter
otherwise direct, upon application of such person and for good cause shown), filed with the Register in Chancery, Court of Chancery, New Castle County Courthouse, 500 North King Street, Wilmington, Delaware 19801, and served (electronically, by
hand, or overnight mail) on plaintiffs and defendants counsel, at the addresses below, the following: (i) proof of current ownership of Dendreon stock; (ii) a written notice of the Objectors intention to appear;
(iii) a detailed statement of the objections to any matter before the Delaware Court; and (iv) a detailed statement
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of all of the grounds thereon and the reasons for the Objectors desire to appear and to be heard, as well as all documents or writings which the Objector desires the Court to consider.
Carmella P. Keener, Esq.
Rosenthal Monhait & Goddess, P.A.
919 Market Street, Suite 1401
Wilmington, DE 19899
ckeener@rmgglaw.com
Jeffrey
S. Abraham, Esq.
Abraham, Fruchter & Twersky, LLP
One Penn Plaza, Suite 2805
New
York, NY 10119
jabraham@aftlaw.com
Attorneys for Plaintiff Herbert Silverberg
William B. Federman, Esq.
Federman & Sherwood
10205 N. Pennsylvania Avenue
Oklahoma City, OK 73120
wbf@federmanlaw.com
Shannon
L. Hopkins, Esq.
Levi & Korsinky, LLP
30 Broad Street, 24th Floor
New York, NY 10004
shopkins@zlk.com
Attorneys
for Plaintiffs Paula Nicholas
and Fang Liu
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Craig W. Smith, Esq.
Robbins Arroyo, LLP
600 B
Street, Suite 1900
San Diego, CA 92101
csmith@robbinsarroyo.com
Frank J. Johnson, Esq.
Johnson & Weaver, LLP
110 West A Street, Suite 750
San Diego, CA 92101
frankj@johnsonandweaver.com
Attorneys for Plaintiffs James M. McCallion
And David Wallace
Kenneth J. Nachbar, Esq.
Morris, Nichols, Arsht & Tunnell LLP
1201 North Market Street, 16th Floor
P.O. Box. 1347
Wilmington, DE
19899
knachbar@mnat.com
Attorneys for Nominal Defendant
Dendreon Corporation
Norman J. Blears, Esq.
Sidley
Austin LLP
1001 Page Mill Road
Building 1
Palo Alto, CA 94304
nblears@sidley.com
Michael L. Charlson, Esq.
Vinson & Elkins LLP
525 Market Street, Suite 2750
San Francisco, CA 94105
mcharlson@velaw.com
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Raymond J. DiCamillo, Esq.
Richards, Layton & Finger, PA
One Rodney Square
920 North
King Street
Wilmington, DE 19801
dicamillo@rlf.com
Attorneys for Defendants
Susan B. Bayh, Hans E. Bishop,
Gerardo Canet, Bogdan Dziurzynski,
Mark W. Frohlich, Pedro Granadillo,
Richard J. Ranieri, Gregory T. Schiffman,
David C. Stump, David L. Urdal and
Douglas G. Watson
Robert M. Sulkin, Esq.
McNaul
Ebel Nawrot & Helgren PLLC
600 University Street, Suite 2700
Seattle, WA 98101
rsulkin@mcnaul.com
Collins J.
Seitz, Jr., Esq.
Seitz Ross Aronstam & Moritz LLP
100 S. West Street, Suite 400
Wilmington, DE 19801
cseitz@seitzross.com
Attorneys for Defendant Mitchell H. Gold, M.D.
Bahram Seyedin-Noor, Esq.
Alto Litigation
4 Embarcadero
Center, Suite 1400
San Francisco, CA 94111
bahram@altolit.com
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Kurt M. Heyman, Esq.
Proctor Heyman LLP
300
Delaware Avenue
Wilimington, DE 19801
kheyman@protorheyman.com
Attorneys for Defendant Richard F. Hamm
Any person or entity who fails to object in the manner prescribed above shall be deemed to have waived such objection
(including the right to appeal), unless the Delaware Court in its discretion allows such objection to be heard at the Settlement Hearing, and shall forever be barred from raising such objection in these Actions or any other action or proceeding or
otherwise contesting the Stipulation or the Fee and Expense Application, and will otherwise be bound by the Judgment to be entered and the releases to be given. You are not required to appear in person at the Settlement Hearing in order to have your
timely and properly filed objection considered.
XI. |
WHAT ARE THE TERMS OF THE PROPOSED ORDER AND FINAL JUDGMENT? |
If
the Court determines that the Stipulation is fair, reasonable, adequate, and in the best interests of Dendreon and its stockholders, the parties shall jointly request that the Delaware Court enter an Order and Final Judgment, which will, among other
things:
1. Approve the Stipulation and adjudge the terms thereof to be
fair, reasonable, adequate, and in the best interests of Dendreon and its stockholders, pursuant to Court of Chancery Rule 23.1;
2. Determine that appropriate notice of the Actions, the Stipulation, the
Settlement Hearing, and the right to appear was provided pursuant to Court of Chancery Rule 23.1.
3. Authorize and direct the parties to consummate the settlement in accordance
with the terms and conditions of the Stipulation and reserve jurisdiction to supervise the consummation of the Stipulation provided therein;
4. Dismiss the Delaware case with prejudice in accordance with the terms of the
Stipulation and grant the releases described more fully above and in accordance with the terms and conditions of the Stipulation. Separately, Plaintiffs
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will seek dismissal of the actions pending in the Washington Court and the Federal Court with prejudice and without costs to any party;
5. Grant Plaintiffs Counsels Fee and Expense Application, as the
Delaware Court deems appropriate.
XII. |
HOW DO I GET ADDITIONAL INFORMATION ABOUT THE SETTLEMENT? |
This
Notice is not all-inclusive. The references in this Notice to the pleadings in the Actions, the Stipulation and other papers and proceedings are only summaries and do not purport to be comprehensive. For the full details of the Actions, claims that
have been asserted by the parties, and the terms and conditions of the settlement, including a complete copy of the Stipulation, stockholders of Dendreon are referred to the court files in the Actions. You or your attorney may examine the Delaware
Court files during regular business hours of each business day at the office of the Register in Chancery, Court of Chancery, New Castle County Courthouse, 500 North King Street, Wilmington, Delaware 19801. Questions about the settlement or about
this Notice in general may be addressed to Plaintiffs Counsel:
Jeffrey S. Abraham, Esq.
Abraham, Fruchter & Twersky, LLP
One Penn Plaza, Suite 2805
New
York, New York 10119
Tel: (212) 279-5050
jabraham@aftlaw.com
PLEASE DO NOT WRITE OR CALL THE COURT
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BY ORDER OF THE COURT |
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Dated: January 21, 2014 |
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/s/ Register in Chancery |
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Register in Chancery |
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