A federal judge in New York yesterday declined to grant Guidant’s sealed motion for summary judgment and gave the parties in the case until July 21 to explain why the documents should be left under seal, according to court documents.
J&J had a $25 billion deal to purchase the Indianapolis-based firm in late 2004. But a series of product recalls prompted the New Brunswick, N.J.-based medical devices giant to pull out. Guidant sued J&J and the companies settled on a $21 billion price tag. Boston Scientific swooped in shortly after with a $25 billion opening salvo in December 2005, eventually winning the dubious prize of paying $80 per share for Guidant ($42 in cash and $38 in stock). The $27 billion buyout marked a victory over one of its arch rivals, but the bidding war helped drive up the cost significantly, including a $705 million break-up fee to J&J for killing the initial deal.
"While Boston Scientific ultimately succeeded in its takeover bid for Guidant, it did so only because Guidant leaked confidential information to a third party, Abbott, for the purpose of arranging a prepackaged divestiture of significant Guidant businesses to Abbott. Based on these disclosures, which were in material breach of the terms of Guidant’s merger agreement with J&J, Abbott agreed to enter into a divestiture and financing agreement with Boston Scientific, which allowed Boston Scientific to make an offer for Guidant that would not require a lengthy and uncertain antitrust review," according to the records. "This, in turn, allowed Guidant to accept Boston Scientific’s offer as ‘superior’ to J&J’s offer and to terminate the agreement with J&J. Thus, Guidant’s breach of its agreement with J&J, and Boston Scientific’s and Abbott’s tortious interference with that agreement, deprived J&J of the benefit of the bargain of its merger with Guidant and caused it to suffer damages."
Yesterday Judge Richard Sullivan denied Guidant’s summary judgment motion, but kept the order explaining why under seal, according to the documents.
"For the reasons set forth in the court’s separately issued order of this date, which has been docketed under seal, defendant’s motion for summary judgment is denied. Pursuant to the stipulated protective order in this case that governs, inter alia, the use of confidential discovery material throughout this litigation, the parties filed their papers relevant to defendant’s motion for summary judgment under seal," Sullivan wrote. "However, in light of the strong presumption of public access to judicial documents and, in particular, adjudications of substantive rights, it is hereby ordered that the parties shall submit letters no later than July 21, 2014, addressing whether there is any need for the court’s [motion for summary judgment] order and the parties’ submissions to be filed under seal and, if so, proposing any necessary redactions for the version(s) that will be publicly docketed."