SAN DIEGO, Oct. 10, 2017 /PRNewswire/ -- NuVasive, Inc.
(NASDAQ: NUVA), a leading medical device company focused on
transforming spine surgery with minimally disruptive,
procedurally-integrated solutions, today announced that it has
filed a lawsuit in the Delaware
Chancery Court against Patrick S.
Miles, former vice chairman of the Company and a member of
NuVasive's Board of Directors. The lawsuit asserts that before
abruptly resigning from the Company to join Alphatec Holdings, Inc.
(NASDAQ: ATEC), Mr. Miles engaged in a scheme for over a year to
divert corporate opportunities and then announced he would join
Alphatec in violation of his contractual obligations to NuVasive.
In the lawsuit, NuVasive argues Mr. Miles' divided loyalties
constituted a clear breach of his fiduciary duties to NuVasive and
its stakeholders, and that he violated his non-competition and
non-solicitation obligations to the Company.
NuVasive issued the following statement:
This step was not taken lightly, particularly given Mr. Miles'
history with NuVasive. Yet it is this history and Mr. Miles'
intimate knowledge of the Company and our proprietary information
that makes his breach of fiduciary duties and contractual
obligations so egregious and this litigation necessary.
It is not the Company's preference to proceed down a litigation
path, but it would be contrary to our own responsibilities to
ignore Mr. Miles' actions. To be clear, Mr. Miles' conduct has
precipitated this lawsuit, which we believe is necessary to protect
NuVasive's rights and interests and the interests of our
stakeholders. We will continue to take all appropriate steps in
this regard.
As detailed in the complaint:
- In January 2016, NuVasive was
contacted by UBS Financial Services Inc. to explore NuVasive's
interest in acquiring Alphatec. Miles was NuVasive's president and
chief operating officer at the time. Miles advised NuVasive that
pursuing such acquisition was "a waste of time," and that Alphatec
had an "aged, undifferentiated portfolio." Consistent with Miles'
comments, NuVasive passed on the opportunity.
- Then, on March 22, 2017, Miles
secretly executed a securities purchase agreement to purchase
$500,000 of Alphatec stock in a
private placement. Miles and Alphatec concealed this investment by
purchasing shares in Alphatec through an entity called "MOM" and
failing to disclose that Miles was the beneficial owner of the
shares. While still an employee and a member of the NuVasive Board,
Miles negotiated an offer from Alphatec to serve as its executive
chairman. As part of that offer, as an inducement to his
employment, Alphatec granted Miles 1,000,000 Restricted Stock Units
(a market value of $3,220,000 at
Alphatec's closing price as of October 2,
2017). Miles also agreed to purchase 1.3 million shares at
$2.26 per share (a $2,938,000 investment) and is to be granted
warrants to purchase up to an additional 1.3 million shares of
Alphatec stock upon the closing of his purchase. Miles will own
about 15% of the outstanding shares of Alphatec's stock and, with
the warrants he has been granted, could potentially own up to 23%
of Alphatec's outstanding stock.
- On Sunday, October 1, 2017, Miles
notified NuVasive that he was resigning his position as vice
chairman and a member of the Board effective immediately. He
planned to commence employment as Alphatec's executive chairman the
next day, and he did not intend to honor his contractual
commitments to refrain from: 1) working for a competitor, 2)
soliciting NuVasive's customers and 3) recruiting NuVasive's
employees.
A full copy of the complaint will be available at NuVasive's
website.
NuVasive stated it is continuing to investigate and will file
further claims if warranted.
DLA Piper is serving as legal counsel to NuVasive in connection
with this matter.
About NuVasive
NuVasive, Inc. (NASDAQ: NUVA) is transforming spine surgery and
beyond with minimally invasive, procedurally-integrated solutions
designed to deliver reproducible and clinically-proven surgical
outcomes. The Company's portfolio includes access instruments,
implantable hardware, biologics, software systems for surgical
planning, navigation and imaging solutions, magnetically adjustable
implant systems for spine and orthopedics, and intraoperative
monitoring service offerings. With $962
million in revenues (2016), NuVasive has an approximate
2,300 person workforce in more than 40 countries serving surgeons,
hospitals and patients. For more information, please visit
www.nuvasive.com.
Forward-Looking Statements
NuVasive cautions you that statements included in this news
release that are not a description of historical facts are
forward-looking statements that involve risks, uncertainties,
assumptions and other factors which, if they do not materialize or
prove correct, could cause NuVasive's results to differ materially
from historical results or those expressed or implied by such
forward-looking statements. The potential risks and uncertainties
which contribute to the uncertain nature of these statements
include, among others, risks associated with the acceptance of the
Company's surgical products and procedures by spine surgeons,
development and acceptance of new products or product enhancements,
clinical and statistical verification of the benefits achieved via
the use of NuVasive's products (including the iGA™ platform), the
Company's ability to effectually manage inventory as it continues
to release new products, its ability to recruit and retain
management and key personnel, and the other risks and uncertainties
described in NuVasive's news releases and periodic filings with the
Securities and Exchange Commission. NuVasive's public filings with
the Securities and Exchange Commission are available at
www.sec.gov. NuVasive assumes no obligation to update any
forward-looking statement to reflect events or circumstances
arising after the date on which it was made.
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SOURCE NuVasive, Inc.