On August 12, 2020 PDL BioPharma, Inc. ("PDL" or the "Company") (Nasdaq: PDLI) reported it has entered into a settlement agreement (the "Settlement Agreement") with related entities of Defined Diagnostics, LLC (f/k/a Wellstat Diagnostics, LLC) ("Wellstat Diagnostics" and, together with such related entities, the "Wellstat Parties") resolving previously reported litigation relating to loans made to Wellstat Diagnostics by PDL (Press release, PDL BioPharma, AUG 12, 2020, View Source [SID1234565092]). The loans totaling $44,100,000 were made pursuant to a loan agreement between Wellstat Diagnostics and PDL dated August 2013, and the notes were carried on PDL’s balance sheet for $51,391,184 as of June 30, 2020.
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Under the terms of the Settlement Agreement, the parties agreed that the Wellstat Parties would pay an amount of $7,500,000 upon the signing of the Agreement and either (1) $5,000,000 by February 10, 2021 and $55,000,000 by July 26, 2021; or (2) $67,500,000 by July 26, 2021. Further under the terms of the Agreement, upon payment of either $5,000,000 prior to April 21, 2021 or completion of the payment of $67,500,000 by July 26, 2021, the Company will transfer to Wellstat Diagnostics on an "as is" and "where is" basis certain assets currently owned by the Company which were obtained through the Company’s credit bid in 2017 for the assets of Wellstat Diagnostics. If the Wellstat Parties fail to make payment in full by July 26, 2021, the Company shall be authorized to record and confess judgment against the Wellstat Parties for an amount of $92,500,000 or such lesser amount as may be owed under the Agreement.
"We are pleased that we have finally reached this settlement with the Wellstat parties. We look forward to receiving the agreed payments, which should increase the net proceeds from our monetization strategy that we can ultimately distribute to our stockholders," commented PDL’s President and CEO Dominique Monnet. "I commend our legal team, led by our General Counsel Christopher Stone, for their dedication and persistence."
In September 2019, PDL announced that the Supreme Court of New York County of New York, Commercial Division, issued a summary judgment in favor of PDL in the Company’s litigation with Wellstat Diagnostics recognizing the validity and enforceability of guarantees on the loans made by the guarantors under the loan facility.