Cipla, Inc. Sued for Damages Based On Its Alleged Submission and Subsequent Repudiation of Irrevocable Bids to Purchase Assets From Achaogen, Inc.
May 27, 2021, District Of Delaware – Trustee Edward E. Niger as Plan Trustee of Achaogen Plan Trust for the bankruptcy estate of Debtor Achaogen, Inc. brings an action against Defendant Cipla, Inc. for damages based on Cipla’s “submission and subsequent repudiation of irrevocable bids” to purchase certain assets from the Debtor while Debtor was in bankruptcy.
The Trustee argues that Cipla “refused” to honor its obligation to purchase certain assets of the Debtor and in doing so “undermined” an orderly bankruptcy process by delaying and ultimately failing to consummate its respective, agreed-to transactions. Specifically, the Trustee alleges that Cipla “intentionally walked away” from its bids to acquire (i) rights in China to a drug known as Plazomicin, and (ii) the global rights to a separate drug known as C- Scape. According to the complaint, Cipla’s bid of $8.4 million for the China assets was allegedly designated as the backup bid, that Cipla allegedly refused to honor. The Trustee argues that since Cipla “breached and failed to honor its obligations”, the Debtor incurred significant expenses and lost proceeds in an amount to be determined at trial.
The Trustee accuses Cipla of “breach of oral contract, bad faith, tortious interference with contract & business relations, promissory estoppel, breach of the implied covenant of good faith, and fair dealing”, among other causes of actions. The Trustee urges the court to order Cipla to compensate the Achaogen Plan Trust for the costs and damages incurred by the bankruptcy estate in connection with Cipla’s “breaches in failing to consummate” the said purchases and impose civil sanctions against Cipla for its “willful violation” of the court orders.
The case is In re Achaogen, Inc. in the United States Bankruptcy Court for District of Delaware, Case Number:19-10844 (BLS). The Trust is being represented by Cole Schotz P.C. and ASK LLP.