Balky insurance companies delayed a final settlement between Wright Medical (NSDQ:WMGI) and the plaintiffs in product liability lawsuits brought over its metal-on-metal hip implants, according to a regulatory filing.
Last October Wright agreed to an $89.8 million deal resolving any metal-on-metal hip claims not covered by a previous, $240 million settlement. But the new agreement was contingent on a $35 million payment from insurance proceeds that were to have been received by the end of 2017.
When the insurance contingency failed to materialize by Dec. 29, Wright and the plaintiffs extended the deadline to Feb. 28, and then again on Feb. 23, to March 30.
By March 29, however, the insurers had delivered only $20 million, prompting another amendment to address the deficit without scuttling the deal, according to the filing.
The latest change gives Tennessee-based Wright until Sept. 30 to either cough up the $15 million or transfer any unsettled claims against its insurers to the plaintiffs. If the latter occurs, the parties would sign a $541 million stipulated judgment “collectible only from the applicable insurance carriers with whom [Wright] has not settled,” according to the filing.
“In no event will the stipulated judgment be collectible from [Wright] or any of its affiliates,” the company said, adding that the stipulated judgment would give it until March 7, 2019, to make good on the $15 million insurance deficit.
If the plaintiffs lawyers collect more than they’re owed in fees and costs, they’re due to reimburse Wright for the insurance deficit, plus 10% annual interest, and another $5 million for its own costs and fees, according to the filing.