A Delaware judge this week ordered formal submissions from both Unilife (NSDQ:UNIS) and Insulet (NSDQ:PODD) as the companies fought over Unilife’s Chapter 11 sale, with Insulet claiming Unilife is selectively refusing to supply appropriate information and restricting it’s ability to participate.
Insulet claims that Unilife has not provided it with enough data to make an informed bid on the assets, and has specifically targeted the company in its refusals, even after it signed a non disclosure agreement in May.
“Insulet submits that it is functionally impossible to value the Debtors’ intellectual property without knowing the pricing, development and licensing terms, and other key terms of the agreements between the Debtors and its customers, such as Amgen,” the company wrote in its letter.
Insulet went on to request that the court compel Unilife to “comply with the spirit and terms of the bidding procedures and open up the sale process so that all potential bidders, including outside third-parties such as Insulet, have a genuine ability to participate in the sale process.”
In response, Unilife argued that allowing Insulet access to sensitive information would hurt its dual-track process, which includes a possible reorganization and restructuring of the business.
In its letter to the court, Unilife argued that Insulet is a “competitor and the information it sinks is sensitive competitive information, the disclosure of which could damage the Debtors’ business and destroy value.”
Unilife goes on to accuse Insulet of “not participating in the sale process out of a legitimate desire to purchase the Debtor’s business assets, but rather (as is frequently the case) to appropriate proprietary information and trade secrets to gain a strategic advantage and potentially damage the Debtors’ sale or restructuring prospects.”
In the letter, Unilife said it had gone “to great lengths” to accommodate their requests for information, including access to an electronic data room, a tour of their York, Penn.-based facilities, a management presentation and redacted versions of customer contracts. “Insulet has requested and received more information than any other prospective bidder,” Unilife claims in its letter.
Unilife suggested that Insulet submit a conditional bid with an amount it’s willing to pay, subject to certain assumptions or conditions regarding information not provide, “or to simply walk away from the sale process,” according to its letter.
In May, Unilife won approval from the US Bankruptcy Court for the District of Delaware for its chapter 11 bid and plans for a sale, despite not having completed every step in the process.