Item 7.01 Regulation FD Disclosures.
Bahamas Surgery Center
On March 30, 2018, the Court in the matter styled
Bahamas Surgery Center, LLC v. Kimberly-Clark Corporation and Halyard Health, Inc.,
No. 2:14-cv-08390-DMG-SH (C.D. Cal.) (
“Bahamas”
), ruled on the defendants’ three post-trial motions.
The court denied all three motions, except it granted in part the motion to reduce the award of punitive damages. The Court reduced the punitive damages awarded against Halyard Health from $100 million to $1.3 million, and it reduced the punitive damages awarded against Kimberly-Clark Corporation (“Kimberly-Clark”) from $350 million to $19.4 million.
The total compensatory and punitive damages plus pre-judgment interest awarded against Halyard Health is $1.6 million, and against Kimberly-Clark it is $24.4 million.
The plaintiff has until April 9, 2018 to either agree to the reduction in the punitive damages or seek a new trial limited to determining the proper amount of the punitive damages, if any.
We intend to continue our vigorous defense of the
Bahamas
matter.
We have previously notified Kimberly-Clark that we have reserved our rights to challenge any purported obligation to indemnify Kimberly-Clark for the punitive damages awarded against them in the
Bahamas
matter. That issue remains the subject of litigation in the matters styled
Halyard Health, Inc. v. Kimberly-Clark Corporation
, Case No. BC659662 (County of Los Angeles, Superior Court of California) and
Kimberly-Clark Corporation v. Halyard Health, Inc.,
Case No. 2017-0332-AGB (Court of Chancery of the State of Delaware). We intend to vigorously pursue our case against Kimberly-Clark in California and to vigorously defend against their case against us in Delaware.
Jackson
In the matter styled
Jackson v. Halyard Health, Inc., Robert E. Abernathy, Steven E. Voskuil, et al.,
No. 1:16-cv-05093-LTS (S.D.N.Y.), filed on June 28, 2016, the plaintiff brought a putative class action against the Company, our Chief Executive Officer, our Chief Financial Officer and other defendants, asserting claims for violations of the Securities Exchange Act, Sections 10(b) and 20(a). The plaintiff alleged that the defendants made misrepresentations and failed to disclose certain information about the safety and effectiveness of our MicroCool gowns and thereby artificially inflated the Company’s stock prices during the respective class periods. The alleged class period for purchasers of Kimberly-Clark securities who subsequently received Halyard Health securities was February 25, 2013 to October 21, 2014, and the alleged class period for purchasers of Halyard Health securities was October 21, 2014 to April 29, 2016. On February 16, 2017, we moved to dismiss the case.
On March 30, 2018, the court granted our motion to dismiss, without leave to amend. The plaintiff will have 30 days after entry of judgment to file his notice of appeal. If the plaintiff appeals, we intend to continue our vigorous defense of this matter.