Retrophin paid Martin Shkreli 'undisclosed sum' to settle yearslong legal disputes
Remember when Retrophin disclosed in June that it’s finally settled up the four-year legal saga with founder and former CEO Martin Shkreli? In an update for investors on Wednesday, the company added that it had paid an undisclosed sum to the infamous biotech exec and financier as part of the agreement — though it won’t say how much.
Shkreli, who’s serving a 7-year prison sentence for defrauding investors of his hedge funds, had “agreed to extinguish his rights to future advancement of legal fees and indemnification by the company (other than for certain pending litigation), and to abide by certain standstill restrictions,” the company added in a 10-Q filing first reported by CNBC.
Retrophin filed a lawsuit against the “Pharma Bro” in 2015, a year after he was forced out of the company. Shkreli subsequently brought a countersuit, and earlier this year added another accusation directly against three directors of the board earlier this year seeking more than $30 million in damages. He lashed out against Retrophin’s board chairman Gary Lyons, former company CEO (and current director) Stephen Aselage, and the company’s former lawyer, Margaret Valeur-Jensen.
But before the arbitration hearing was scheduled to take place, the two sides reached a “comprehensive settlement covering all of the disputes between them.”
It was all memorialized on June 17, 2019:
Under the terms of the Settlement Agreement, each of the parties’ pending claims and counterclaims were dismissed with prejudice (and Mr. Shkreli dismissed, with prejudice, the SDNY Action), and the parties, including Retrophin on behalf of Mr. Aselage, Dr. Valeur-Jensen, and Mr. Lyons, granted on another a broad mutual release of claims.
When prompted by CNBC, both Retrophin and Shkreli’s civil lawyer, Edward Kang, declined to divulge the size of the payment but said they were pleased the case is over.
After leaving Retrophin Shkreli went on to start Turing Pharmaceuticals, where he stirred up a storm of criticism and quickly became the archetypal villain of the biopharma world with his decision to jack up the price of an old HIV drug, Daraprim, by more than 5,000%. He reportedly kept a hand on the wheels at the company, now rechristened Phoenixus, coordinating business behind bars with a contraband cell phone.
He has since been transferred from Fort Dix, New Jersey to another low-security prison in Allenwood, Pennsylvania.
His criminal convictions, of course, had nothing to do with the price-gouging controversy. Instead, he was punished for lying repeatedly to his investors at MSMB Capital Management and MSMB Healthcare about the performance of his investments with their money, and the amount of cash he had to work with. He was also convicted of securities fraud related to Retrophin — which was founded under the MSMB umbrella.