Teva: 28 million settlement agreement in three derivative proceedings filed against the company and it's officers

Posted on Jun 6, 2021 by Ifi Reporter

Economic Judge Ruth Ronen approved a $ 28 million settlement agreement in three derivative proceedings filed against Teva and its officers. The main lawsuit dealt with claims for damages to the company and its shareholders following the transaction in which Teva acquired Actavis, Allergan's generic pharmaceutical division, for $ 40.5 billion. Most of the purchase amount was in debt. Among the defendants were also former CEO Erez Vigodman and former director Galia Maor.
The settlement agreement was drawn up as part of three proceedings submitted to the Tel Aviv District Court - two requests for derivative approval and another request for disclosure of documents - and was formulated after a mediation procedure before retired judge Danya Keret-Meir. According to the approved agreement, the insurance company will pay Teva $ 28 million - NIS 95 million on behalf of the defendants. One of the plaintiffs sought to withdraw his consent to be a party to the settlement agreement, but the judge denied his request, ruling that he did not meet the burden of showing proper justification for it.
The Teva Board of Directors (directors who Teva claims had no connection to the claims) approved the proposed compromise, arguing that it was reasonable and appropriate in the circumstances. The Attorney General announced that he did not object without expressing a position on the substance of the matter. Judge Ronen referred to Teva's defense arguments and ruled that the settlement amount reflects the chances and risks in the case. She noted with respect to the approval of the agreement by the Board of Directors that the fact that most of the members of the Board of Directors have been replaced since the date of the Actavis transaction, and the fact that the decision was made only by the uninfected directors, warrant weight for approval, but are not sufficient. Therefore, she noted, the board's decision is another weighty consideration that the settlement is a proper settlement, but does not override the court's discretion in the issue.
Finally, the judge ruled that the lawyers (3 offices) and the plaintiffs (3 derivative plaintiffs) will receive NIS 11 million, in addition to the amount that Teva will receive, according to a division it determined. The mediator's offer was for a higher fee and reward of $ 4.9 million (about NIS 16 million).


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