Overview
Corporate restructurings can help companies grow, simplify operations, and prepare for long-term success. But when a company has a complex history involving mergers, acquisitions, predecessor entities, or older financial instruments, legal disputes can arise years later.
Garibian Law represented a publicly traded life sciences and biotechnology company facing multiple legal challenges after a corporate restructuring. Several parties claimed they were entitled to shares of the company’s publicly traded stock based on older debt instruments issued by predecessor entities.
The claims created serious risk. If successful, they could have caused stock dilution, ongoing litigation costs, investor concern, and uncertainty around the company’s corporate structure.
Garibian Law developed a proactive litigation strategy to clarify the company’s obligations and protect the public parent company from claims tied to historical financial instruments.
The Client
The client was a publicly traded life sciences and biotechnology company operating in a highly regulated industry. As part of its growth strategy, the company completed a corporate restructuring designed to improve its organizational structure while preserving existing business operations.
As the company grew, it attracted more attention from investors, stakeholders, and third parties. That growth also brought increased scrutiny of older transactions, predecessor entities, and legacy obligations.
The company needed legal counsel that could address complex corporate history, Delaware law, creditor claims, and high-stakes litigation at the same time.
The Challenge
After the restructuring, multiple parties claimed they had the right to receive shares in the public company based on debt instruments issued years earlier by predecessor entities.
The claimants argued that the restructuring transferred certain obligations to the newly formed parent company. They sought to enforce conversion rights against the public entity.
The risks were significant. If the claims moved forward successfully, the company could face:
Without decisive action, the company could have remained tied up in litigation and legal threats for years.
The Strategy
Garibian Law performed a detailed review of the company’s corporate history, restructuring records, organizational documents, and the financial instruments at issue.
The firm determined that the central legal issue was whether obligations of predecessor entities transferred to the newly formed public parent company through the Delaware holding-company reorganization.
Rather than wait for more lawsuits or respond only after claims were filed, Garibian Law took a proactive approach. The firm initiated declaratory judgment actions in federal court to seek clear rulings on the parties’ rights and obligations.
This strategy helped the company take control of the litigation, choose an appropriate forum, and seek judicial clarity on issues that had created uncertainty for years.
The Solution
Garibian Law focused on showing that the restructuring complied with Delaware law and that the liabilities connected to the older financial instruments remained with the proper subsidiary, not the public parent company.
The firm also challenged multiple counterclaims from the opposing parties. Garibian Law successfully argued that those counterclaims lacked legal and factual support.
To strengthen the company’s position, Garibian Law worked with a recognized Delaware corporate law expert to analyze the restructuring and support the company’s legal arguments.
This combination of litigation strategy, corporate law analysis, and expert support positioned the company for a strong outcome.
The Results
Garibian Law achieved significant results for the client.
Key Takeaway
This case shows how proactive litigation can help companies resolve uncertainty before it causes long-term damage.
By seeking clear judicial rulings, Garibian Law helped the client protect its corporate structure, reduce legal risk, and move forward with greater confidence.
If your company is facing a corporate restructuring dispute, creditor claim, shareholder issue, or complex commercial litigation matter, Garibian Law can help you evaluate your options and protect your business interests.
Past results do not guarantee future outcomes. Every case depends on its own facts and applicable law.
