Merrimack Pharmaceuticals Inc. agreed to resolve a lawsuit, pending in the Court of Chancery in the State of Delaware, filed against the company by certain holders of its convertible notes.
The noteholders, Wolverine Flagship Fund Trading Ltd., 1992 MSF International Ltd. and 1992 Tactical Credit Master Fund LP, and Wells Fargo Bank NA, alleged the company was obligated to offer to repurchase its outstanding 4.50% convertible notes due 2020 in connection with its asset sale to Ipsen SA.
Under the settlement, the company will pay about $32.5 million in cash to the plaintiffs, representing 90 cents per $1 of convertible notes, plus accrued unpaid interest on the notes. Merrimack will also pay a total of about $3.8 million for the plaintiffs' attorneys' fees and expenses.
The noteholders collectively hold about $35.8 million aggregate principal amount of the notes.
Merrimack also agreed to start a tender offer for all remaining convertible notes at 90 cents per $1 of convertible notes, plus accrued interest, which would eliminate all of its remaining debt if all noteholders participate.