Judge Finds Bausch Health Spin-Off Not “Imminent;” Orders Bausch Health to Provide Advance Notice of Intent to Spin in Order to Allow Injunction Challenge
New York, NY | December 14, 2022 08:35 AM Eastern Standard Time
Yesterday, New Jersey Chancery Court Judge Margaret Goodzeit declined to set a preliminary injunction hearing to enjoin Bausch Health Companies Inc. (“Bausch Health”) from completing its corporate spin-off of its vision care business (“Bausch + Lomb”) after Bausch Health expressly represented to the Court that it has not yet determined that the last step of the spin-off — a share dividend of its Bausch + Lomb shares — will occur.
Given Bausch Health’s representation that the dividend is merely “speculative” and that there will be at least 55 days’ public notice if the dividend is going to proceed, the Court found that it was not appropriate to set an injunction hearing at this time. However, in order to protect the potential judgment creditor plaintiffs in the event Bausch Health decides to change course, the Court ordered Bausch Health to provide Rolnick Kramer Sadighi LLP (“RKS”), attorneys representing plaintiffs in the case, “at least 14 days notice of any action, vote, or decision which could result in the modification or elimination of the 55 day advance public notice...”
“Although we are relieved that Bausch represented that the spin-off was not imminent and might not happen at all, we are pleased that the Court ordered Bausch to provide timely advance notice of any attempt to proceed with its ill-conceived spin-off," said Larry Rolnick of RKS. "Timely advance notice will help ensure that creditors have a meaningful opportunity to obtain an injunction," he added.
The Court’s ruling means that if Bausch Health decides to complete the divestiture of its Bausch + Lomb assets through a share dividend or any other means, RKS’s clients will have a court-ordered opportunity to seek to enjoin the transaction.
Rolnick Kramer Sadighi, LLP (RKS) provides strategic litigation solutions for the investment management community. Launched in 2020, RKS is a premier securities litigation boutique dedicated to serving the investment management industry, including hedge funds, mutual funds, private equity, credit, real estate, and structured finance firms. For more information, visit RKS online: https://www.rksllp.com/.