Novelion Therapeutics Inc. (NASDAQ:NVLN) Files An 8-K Other Events
Item 8.01. Other Events.
As previously disclosed, on June 20, 2019, Whitefort Capital Master Fund, LP (“Whitefort”) filed a petition (the “Whitefort Action”) against Novelion Therapeutics Inc. (“Novelion” or the “Company”), as respondent, in the Supreme Court of British Columbia (the “BC Court”) seeking (i) a declaration that Novelion has breached section 301 of the Business Corporations Act of British Columbia (“Section 301 of the BCA”), (ii) an order to Section 301 of the BCA requiring Novelion to hold a special meeting of its shareholders to vote on whether Novelion should “dispose of” the intercompany loan between Novelion (as lender) and Aegerion Pharmaceuticals, Inc. (“Aegerion”) (as debtor) (the “Intercompany Loan”) to the terms of a Restructuring Support Agreement entered into by, inter alia, Novelion and Aegerion on May 20, 2019 in connection with Aegerion’s Chapter 11 plan of reorganization (the “Plan of Reorganization”) in the United States Bankruptcy Court, Southern District of New York (the “Bankruptcy Court”) Case No. 19-11632 (the “Aegerion Bankruptcy Case”) and (iii) an order to Section 301 of the BCA providing that unless and until the shareholders of Novelion vote to approve the “disposition” of the Novelion Intercompany Loan to the terms of the Restructuring Support Agreement at the special meeting, Novelion is enjoined from consummating such “disposition transaction,” and further that Novelion is required to vote its claim against any Plan of Reorganization that seeks to “dispose of” the Intercompany Loan without a shareholder vote.
On July 16, 2019, following a hearing before the BC Court on July 9, 2019, the BC Court dismissed the Whitefort Action, finding that Novelion’s entering into the Restructuring Support Agreement is not a transaction contemplated by Section 301 of the BCA and therefore no Novelion shareholder vote is required.
Cautionary Information Regarding Trading in the Company’s Securities
Novelion cautions that trading in Novelion’s securities during the pendency of the restructuring transactions contemplated by the Restructuring Support Agreement (the “Restructuring Transactions”) is highly speculative and poses substantial risks. Trading prices for Novelion’s securities may bear little or no relationship to the actual value realized, if any, by holders of Novelion’s securities in the restructuring transactions. Accordingly, Novelion urges extreme caution with respect to existing and future investments in its securities.
Forward Looking and Cautionary Statements
Certain statements in this Form 8-K constitute “forward-looking statements” and “forward-looking information” within the meaning of applicable laws and regulations, including U.S. and Canadian securities laws. Any statements contained herein which do not describe historical facts, including, but not limited to, statements regarding beliefs about, or expectations for, the Restructuring Transactions, are forward-looking statements which involve risks and uncertainties that could cause actual results to differ materially from those discussed in such forward-looking statements.
Such risks and uncertainties include, among others, Novelion’s ability to continue as a going concern, Novelion’s and Aegerion’s ability to meet immediate operational needs and obligations, as well as long term obligations, that Novelion will not realize the benefits of the Restructuring Transactions, that the debtors will not be able to successfully complete the Restructuring Transactions, potential adverse effects of the Aegerion Bankruptcy Case, the debtors’ ability to obtain timely approval by the Bankruptcy Court with respect to motions filed in the Aegerion Bankruptcy Case, the outcome if Whitefort were to successfully appeal the BC Court’s decision, objections to the Restructuring Transactions or other pleadings filed that could protract the Aegerion Bankruptcy Case, the effects of the Aegerion Bankruptcy Case on Novelion and on the interest of various constituents, including holders of Novelion’s common stock, the Bankruptcy Court’s rulings in the Aegerion Bankruptcy Case, risks associated with third party motions in the Aegerion Bankruptcy Case, increased administrative and legal costs related to the Chapter 11 process and other litigation and inherent risks involved in a bankruptcy process, and Novelion’s ability to maintain its listing on Nasdaq especially in light of the previously disclosed delisting notifications received from Nasdaq and given Nasdaq’s ability to exercise discretionary authority to otherwise delist Novelion’s common stock on an accelerated timeline, as well as those risks identified in Novelion’s filings with the SEC, including under the heading “Risk Factors” in Novelion’s Annual Report on Form 10-K for the year ended December 31, 2018, filed on March 15, 2019, as amended, and subsequent filings with the SEC, including its Current Report on Form 8-K filed on May 21, 2019 (which includes important information about the Restructuring Transactions and related matters), all of which are available on the SEC’s website at www.sec.gov. Any such risks and uncertainties could materially and adversely affect Novelion’s results of operations and cash flows, which would, in turn, have a significant and adverse impact on Novelion’s stock price. Novelion cautions you not to place undue reliance on any
