Full Press Release Details
Hyatt Farber Schreck, LLP
North City parkway, Suite 1600
STATES DISTRICT COURT
Relmada Therapeutics, Inc. moves for the entry of a temporary restraining order without notice and preliminary injunction pending
the adjudication on the merits of this case.
Hyatt Farber Schreck, LLP
North City parkway, Suite 1600
Motion is based upon the accompanying Memorandum of Points and Authorities, the declaration of Sergio Traversa, the exhibits attached
to that declaration, and any further evidence and argument this Court chooses to consider.
| DATED this 9th day of December, 2015 | Respectfully submitted, | |
| BROWNSTEIN HYATT FARBER SCHRECK, LLP | ||
| By: | /s/ Jeffrey S. Rugg | |
| JEFFREY S. RUGG, ESQ., Bar # 10978 MAXIMILIEN D. FETAZ, ESQ., Bar # 12737 100 North City Parkway, Suite 1600 Las Vegas, Nevada 89106-4614 | ||
| Attorneys for Plaintiff RELMADA THERAPEUTICS, INC. |
Hyatt Farber Schreck, LLP
North City parkway, Suite 1600
| STATEMENT OF RELEVANT FACTS | 2 | |||
| ARGUMENT | 6 | |||
| A. | Relmada Is Entitled To A Temporary Restraining Order And Preliminary Injunction. | 6 | ||
| 1. | Relmada is Likely to Succeed on the Merits of Its Exchange Act Claim. | 7 | ||
| 2. | Relmada Has Suffered And Is Likely To Continue To Suffer Irreparable Harm Absent Preliminary Relief. | 11 | ||
| 3. | The Balance of Hardships Tips in Favor of Relmada. | 12 | ||
| 4. | Granting a Temporary Restraining Order and Preliminary Injunction Will Serve the Public Interest. | 13 | ||
| B. | The Restraining Order Should Issue Without Notice | 13 | ||
| C. | The Court Should Require Only Nominal Security. | 14 | ||
| CONCLUSION | 14 |
Hyatt Farber Schreck, LLP
North City parkway, Suite 1600
| Page(s) | ||
| Cases | ||
| Allergan, Inc. v. Valeant Pharms. Int'l, Inc. , | ||
| 2014 WL 5604539 (C.D. Cal. Nov. 4, 2014) | 13 | |
| Calumet Indus., Inc. v. MacClure , | ||
| 464 F. Supp. 19 (N.D. Ill. 1978) | 8 | |
| Chevron Corp . v. Pennzoil Co. , | ||
| 974 F.2d 1156 (9th Cir. 1992) | 10 | |
| Clark Pac. v. Krump Constr., Inc. , | ||
| 942 F. Supp. 1324 (D. Nev. 1996) | 11 | |
| Desaigoudar v. Meyercord , | ||
| 223 F.3d 1020 (9th Cir. 2000) | 11 | |
| Dillon v. Scotten, Dillon Co. , | ||
| 335 F. Supp. 566 (D. Del. 1971) | 12 | |
| Edelman v. Salomon , | ||
| 559 F. Supp. 1178 (D. Del. 1983) | 12 | |
| EMAK Worldwide, Inc. v. Kurz , | ||
| 50 A.3d 429 (Del. 2012) | 11 | |
| In re Exxon Mobil Corp. Sec. Litig. , | ||
| 500 F.3d 189 (3d Cir. 2007) | 7 | |
| Global Horizons, Inc. v. U.S. Dept. of Labor , | ||
| 510 F.3d 1054 (9th Cir. 2007) | 7 | |
| Krauth v. Executive Telecard, Ltd. , | ||
| 890 F. Supp. 269 (S.D.N.Y. 1995) | 8, 12 | |
| Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co. , | ||
| 571 F.3d 873 (9th Cir. 2009) | 6, 11 | |
| In re McKesson, HBOC Sec. Litig. , | ||
| 126 F. Supp. 2d 1248 (N.D. Cal. 2000) | 7 | |
| Mills v. Elec. Auto-Lit Co. , | ||
| 396 U.S. 375 (1970) | 13 |
Hyatt Farber Schreck, LLP
North City parkway, Suite 1600
| Morris v. Bush , | ||
| 1999 WL 58857 (N.D. Tex. Jan 28, 1999) | 12 | |
| N.Y.C. Emps.' Ret. Sys. v. Jobs , | ||
| 593 F.3d 1018 (9th Cir. 2010) | 7 | |
| Salamone v. Gorman , | ||
| C.A. No. 9870-VCN, 2014 WL 3905598 (Del. Ch. July 31, 2014) | 11, 13 | |
| Topanga Press, Inc. v. City of L.A. , | ||
| 989 F.2d 1524 (9th Cir. 1993) | 12 | |
| Tracinda Corp. v. DaimlerChrysler AG , | ||
| 502 F.3d 212 (3d Cir. 2007) | 7 | |
| TSC Indus., Inc. v. Northway , | ||
| 426 U.S. 438 (1976) | 8 | |
| United Paperworkers Int'l Union v. Int'l Paper Co. , | ||
| 985 F.2d 1190 (2d Cir. 1993) | 8 | |
| Va. Bankshares, Inc. v. Sandberg , | ||
| 501 U.S. 1083 (1991) | 7 | |
| Winter v. Natural Res. Def. Council, Inc. , | ||
| 129 S. Ct. 365 (2008) | 11 |
| Statutes | |
| 15 U.S.C. 78m(d) | 10 |
| 15 U.S.C. 78n(a) | passim |
| 8 Del. C. 115 | 6 |
| NRS 78.115 | 4 |
| NRS 78.120 | 3 |
| NRS 78.120(1)-(2) | 6 |
| NRS 78.138(3) | 11 |
| NRS 78.139(1)(b) | 11 |
| NRS 78.320 | 6 |
| NRS 78.330(2) | 4, 5, 10 |
| NRS 78.335(4) | 9 |
| NRS 78.335(5) | 5 |
| NRS 78.390(1)(a) | 10 |
| Regulations and Rules | |
| 17 C.F.R. 240.14a-9 | passim |
| Fed. R. Civ. P. 65 | 11 |
| Fed. R. Civ. P. 65(b)(1) | 13 |
| Local Rule 7-5 | 13 |
Hyatt Farber Schreck, LLP
North City parkway, Suite 1600
OF POINTS AND AUTHORITIES
case involves a cut-and-dry violation of the securities laws that govern proxy solicitation statements. Section 14(a) of the Securities
Exchange Act of 1934 ("Exchange Act") and SEC Rule 14a-9, 17 C.F.R. 240.14a-9, prohibit the filing of materially
false and misleading proxy statements with the Securities and Exchange Commission ("SEC") or the dissemination of
other materially false and misleading statements relating to the solicitation of proxies. Defendants Laidlaw & Co. (UK) Ltd.
("Laidlaw"), Matthew D. Eitner, and James P. Ahern (collectively, "Defendants") have issued false and
misleading statements in connection with the annual meeting of stockholders of Relmada Therapeutics, Inc. ("Relmada"
or the "Company") that is scheduled to be held on December 30, 2015.
December 4, 2015, Defendants issued a press release in which they announced the formation of a "Shareholder Value Creation
Committee" that supposedly would "solicit proxies both to elect our [five] director nominees at Relmada's 2015
annual meeting and also . . . to withhold your vote from counting towards a quorum at Relmada's 2015 annual meeting."
Declaration of Sergio Traversa ("Traversa Decl.") 4, Ex. 1 at 8. On December 7, 2015, Defendants filed their
press release on a Schedule 14A. The press release and Schedule 14A (together, the "False Solicitation") were materially
false and misleading because Defendants concealed that they cannot nominate any directors for election at the 2015 annual
meeting-much less five directors-because they failed to provide timely advance notice of these nominations, as the
Company's bylaws require. Id. 11. Thus, an ex parte temporary restraining order is appropriate because
Relmada likely will succeed on the merits in this case.
requires this emergency relief because the Company and its stockholders likely have suffered and will continue to suffer irreparable
harm without it. Courts have recognized that uncertainty and delay surrounding the composition and election of a company's
board of directors-which is precisely what Defendants' present misleading proxy solicitation would achieve-constitutes
irreparable harm. Accordingly, this Court should enjoin Defendants from continuing to disseminate false and misleading proxy materials
and require them to retract or correct those materials.
Hyatt Farber Schreck, LLP
North City parkway, Suite 1600
Relmada Therapeutics, Inc. is a clinical stage, publicly traded specialty pharmaceutical company focused on developing novel versions
of proven drug products and new chemical entities that potentially address areas of high unmet medical need in the treatment of
pain. Traversa Decl. 1; Complaint ("Compl.") 9. Laidlaw and its two principals, Matthew D. Eitner and
James P. Ahern, have a historical relationship with the Company that dates back to 2011 when Laidlaw began to serve as Relmada's
investment adviser. Traversa Decl. 2; Compl. 10. Laidlaw acted as the Company's placement agent in its December
2011 and May 2014 offerings, and as its financial adviser in the merger through which Relmada became a public company. Traversa
Decl. 2; Compl. 10. In connection with these representations, Relmada paid Defendants significant fees and issued
them warrants to purchase stock. Traversa Decl. 3; Compl. 11. Laidlaw acquired the vast majority of the stock that
it beneficially owns in Relmada in the form of warrants for investment banking services that it provided to the Company. Traversa
2015 Annual Meeting of Stockholders is scheduled to be held on December 30, 2015. Traversa Decl. 9; Compl. 12. On
December 4, 2015, Defendants issued a press release announcing the intention of the Shareholder Value Creation Committee1
to launch proxy and consent solicitations by nominating five directors for election or appointment to Relmada's board
of directors. Traversa Decl. 4; Compl. 13. The Press Release was filed with the SEC on Schedule 14A on December
7, 2015. Traversa Decl. 4; Compl. 14. The False Solicitation contains at least four categories of material misrepresentations
the False Solicitation states Defendants' purported intention "to nominate five highly qualified, independent directors
for election or appointment to Relmada's board of directors." Traversa Decl. Ex. 1 at 5. It further states that Defendants
"intend to file with the Securities and Exchange Commission a proxy statement to solicit proxies both to elect our director
nominees at Relmada's 2015 annual meeting and also seeking authority to withhold your vote from counting towards a quorum
at Relmada's 2015 annual meeting." Id. at 8. The False Solicitation urges Relmada stockholders to "NOT
return the proxy card sent to [them] by the current Relmada board of directors" and "NOT vote by responding
to the email solicitations sent to [them] by the current Relmada board of directors." Id. at 9 (emphases in original).
Instead, the False Solicitation urges Relmada stockholders "to wait for the Shareholder Value Creation Committee's
consent solicitation and proxy materials" to be sent to them. Id. at 5.
The False Solicitation notes that the participants in the proxy solicitation and consent solicitation by the Shareholder
Value Creation Committee will include the Defendants in this action-Laidlaw, Matthew D. Eitner, and James P. Ahern.
Hyatt Farber Schreck, LLP
North City parkway, Suite 1600
statements are materially false in that it is an impossibility for Defendants to nominate candidates for election at the 2015
annual meeting, because Defendants unequivocally missed the advance notice deadline for such stockholder nominations. Under
Section 2.1(b)(iv) of the bylaws, stockholders must provide notice of the proposed nomination no later than 120 days prior to
the anniversary of the preceding year's annual meeting:
be timely, a stockholder's notice shall be delivered to the Secretary of the Corporation at the principal executive offices
of the Corporation not later than the close of business on the one hundred twentieth (120th) day and not earlier
than the close of business on the one hundred fiftieth (150th) day prior to the first anniversary of the preceding year's
annual meeting; provided, however, that in the event that the date of the annual meeting is advanced more than thirty
(30) days prior to or delayed by more than thirty (30) days after the anniversary of the preceding year's annual meeting,
notice by the stockholder, to be timely, must be so delivered not later than the later of the close of business on the one hundred
twentieth (120th) day prior to such annual meeting and the tenth (10th) day following the day on which notice of the date of such
meeting is first given to the stockholders, and not earlier than the close of business on the one hundred fiftieth (150th) day
prior to such annual meeting.
Decl. 5, Ex. 2 2.1(b)(iv) (emphasis added). Because Relmada's 2014 annual meeting was held on December 18,
2014, the deadline to submit nominations for the 2015 annual meeting was August 20, 2015. Traversa Decl. 8; Compl.
20. Relmada did not receive notice of any nominations from Defendants by August 20, 2015. Traversa Decl. 11; Compl.
20. Relmada's Board of Directors provided for this deadline in accordance with Relmada's articles of incorporation,
which state that "[t]he board of directors is expressly granted the exclusive power to make, amend, alter, or repeal the
bylaws of the corporation pursuant to NRS 78.120."2 Traversa Decl. Ex. 3 at 8, Art. VI.
NRS 78.120 in turn provides that "the directors may make the bylaws of the corporation" and "[t]he articles
of incorporation may grant the authority to adopt, amend or repeal bylaws exclusively to the directors."
Hyatt Farber Schreck, LLP
North City parkway, Suite 1600
Defendants mislead Relmada's stockholders because they purport to nominate "five, highly qualified, independent directors
for election" at the 2015 meeting to Relmada's board of directors. Traversa Decl. Ex. 1 at 5. Defendants do not disclose,
however, that there are only two seats up for election on Relmada's board at the 2015 annual meeting. Traversa Decl.
12. Relmada has a classified or "staggered" board of directors, meaning that only a certain number of