|  | | 2008 News and Press Releases | | |
SETTLEMENT NEWS:
CYBERONICS, INC.; Cyberonics Announces Settlement of Convertible Note Litigation
Staff Writer
Lab Business Week. May 11, 2008
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EXCERPT: Cyberonics, Inc. (NASDAQ:CYBX) announced that it has settled the previously pending legal proceedings with note holders regarding an alleged default and acceleration of the company's $125 million of 3.0% convertible notes due September 27, 2012 ("Notes") (see also Cyberonics, Inc.). After receiving a notice in October 2006 from Wells Fargo, N.A., the indenture trustee, purporting to accelerate the Notes, the company filed a lawsuit seeking a declaration that it was not in default. In June 2007, the federal district court ruled that the company did not breach the indenture, and the trustee appealed the district court's ruling. With the appeal still pending in the appellate court, the parties have now reached an agreement to settle the proceedings. In exchange for dismissal of Cyberonics' lawsuit and a release from all claims of breach, the company has agreed to repurchase for par value any Note tendered to Cyberonics on December 27, 2011, nine months in advance of the ma-turity of the Notes. This settlement allows the company to reflect the Notes as a long-term liability at the close of its fiscal year, April 25, 2008. Cyberonics will make no additional changes to the terms of the indenture, apart from the supplemental repurchase right. "We are pleased to be able to reach an acceptable resolution of this litigation," commented Dan Moore, Cyberon-ics' President and Chief Executive Officer. "Although we remain confident in our legal position, the improvement to our balance sheet resulting from the settlement provides us with additional fiscal flexibility in our on-going efforts to en-hance shareholder value." |
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