There is a $24 million settlement for investors in Arena Pharmaceuticals common stock that will be divided accordingly: $12,025,000 in cash and $11,975,000 in common stock.
Hang on: the notice says "Arena has the option to pay all or part of the Settlement Shares in cash at the time Arena is to issue the Settlement Shares."
So, it could all be cash? I guess it depends on the share price once the parties file a motion for distribution, which should be about a year after the claim filing deadline, which is… hang on…
April 13, this Friday.
Confused? Worried that Friday is merely days away?
Then call Chicago Clearing Corporation today. CCC can prepare a claim for you, and better yet, can help reconcile a recovery like this one conveniently, which very well might, possibly, maybe, but who knows really, include stock. If need be, we can turn that stock into cash before we allocate settlement awards so that investment managers are not stuck disbursing unwanted securities to their own clients.
This settlement resolves claims that Arena made false and misleading statements and failed to disclose material facts. But then again, they always say that, those settlement notices, don’t they? Farther down on page 4, the allegations are a little clearer:
"Lead Plaintiff alleges that Defendants misled Arena investors about Arena’s development of a new drug for weight loss, lorcaserin, by failing to disclose that a mandatory long-term animal carcinogenicity study (the “Rat Study”) suggested that lorcaserin causes cancer in rats."
Which is bad.
Plaintiffs filed their first complaint on November 1, 2011, then a second complaint on May 13, 2013. The court dismissed the second complaint in November of ’13 saying that, among other reasons, the case boils down to a scientific dispute between Arena Pharma and the FDA, and not a matter of Arena misleading investors. When plaintiffs asked to file a third amended complaint, the court said, “No dice,” or words to that effect, and dismissed the action.
One appeal and nearly three years later and we arrive at October 26, 2016, when the Ninth Circuit Court of Appeals reversed the dismissal and remanded the case to district court. With new life in its suit, plaintiffs fought on through 2017, entering mediation last August, and arriving at a settlement in mid-December.
And now, many years after this case was initially dismissed and a decade at least since those poor rats caught the Big C, (allegedly), we have a settlement for $24 million in cash… or, perhaps, in cash and stock.