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Bioveris Corp. v. Wohlstadter

United States District Court, W.D. Virginia, Charlottesville Division

June 11, 2014

BIOVERIS CORPORATION, Plaintiff,
v.
SAMUEL J. WOHLSTADTER, Defendant

Page 575

For BioVeris Corporation, a Deleware corporation with its principal place of business in Indiana, Plaintiff: Michael J. Lockerby, LEAD ATTORNEY, Foley & Lardner, LLP, Washington, DC; Kellen Christopher Kasper, Nancy J. Sennett, PRO HAC VICE, Foley & Lardner LLP, Milwaukee, WI.

For Samuel J. Wohlstadter, an individual resident of the Commonwealth of Virginia, Defendant: Maurice Francis Mullins, LEAD ATTORNEY, Spotts Fain, PC, Richmond, VA; Amy Jo Eldridge, K& L Gates LLP, Washington, DC.

Page 576

MEMORANDUM OPINION

Hon. Glen E. Conrad, Chief United States District Judge.

In this diversity action, BioVeris Corporation asserts that Samuel J. Wohlstadter breached the terms of a guaranty agreement by failing to pay certain financial obligations owed to BioVeris Corporation by a third party. The case is presently before the court on the plaintiff's motion for summary judgment. For the reasons that follow, the motion will be granted.

Background

The plaintiff, BioVeris Corporation (" BioVeris" ), is a biotechnology company incorporated in Delaware with its principal place of business in Indiana. Mr. Wohlstadter, a Virginia citizen, is the president and chief executive officer of Wellstat Vaccines, LLC (f/k/a 32 Mott Street Acquisition I, LLC) (" Vaccine Newco" or " Vaccines" ), a biotechnology company focused on the manufacture, sale, and distribution of vaccines. The facts of this case are undisputed.

In June 2007, Roche Holding Ltd. acquired BioVeris. Compl. ¶ 8; Answer ¶ 8. As part of that transaction, BioVeris entered into an asset transfer agreement with Vaccines. Compl. ¶ ¶ 8-9; Answer ¶ 9. Under the terms of the Vaccines Asset Transfer Agreement (" VATA" ), BioVeris provided assets related to the research, development, manufacture, production, testing, sale, distribution, and use of vaccines in exchange for a series of payments from Vaccines. VATA 1, Docket No. 14-4. Specifically, Section 2.5 of the transfer agreement required Vaccines to make the following payments to BioVeris: $1,000,000 at closing; $50,000 on each of the first, second, and third anniversaries of the closing date; and $2,709,000 on the third anniversary of the closing date. See id. at 10. The closing date for the agreement was June 26, 2007. Lannert Decl. ¶ 7, Docket No. 14-2. Mr. Wohlstadter signed the asset transfer agreement in his capacity as chief executive officer of Vaccines. VATA 29, Docket No. 14-4. The agreement is dated April 4, 2007. Compl. ¶ 9; Answer ¶ 9.

Also on April 4, 2007, BioVeris entered into an agreement with Mr. Wohlstadter, in which the defendant personally, " absolutely, unconditionally[,] and irrevocably guarantee[d] all obligations of . . . Vaccine Newco to make post-closing payments to [BioVeris] pursuant to Section 2.5 of the Vaccines Asset Transfer Agreement." Guaranty Agreement, Docket No. 1-1. The guaranty agreement provided that " [t]he obligations of the undersigned under or in respect of this guarantee are independent of the guaranteed obligations," and that " a separate action or actions may be brought and prosecuted against the undersigned to enforce this guarantee, irrespective of whether any action is brought against Vaccine Newco . . . or whether Vaccine Newco . . . is joined in any such action." Id. The guaranty agreement was " expressly conditioned upon the closing of the Vaccines Asset Transfer Agreement" and would " terminate automatically and be of no further force and effect upon the termination of the Vaccines Asset Transfer Agreement." Id.

Vaccines made the required payments upon closing and upon the first and second anniversaries of the closing date, but failed to make the required payments to BioVeris on the third anniversary of the closing date, June 26, 2010. In a separate action brought by BioVeris against Vaccines, the United States District Court for the District of Delaware entered judgment in BioVeris's favor in the amount of $2,759,000, plus prejudgment and post-judgment

Page 577

interest.[1] Sennett Decl. Ex. B, Docket No 14-16. BioVeris has not received any payment--from either Vaccines or Mr. Wohlstadter--in satisfaction of this judgment. Lannert Decl. ¶ ¶ 14-15. BioVeris seeks $2,759,000, plus prejudgment interest, post-judgment interest, and the costs of this action.

The case is presently before the court on the plaintiff's motion for summary judgment. Mr. Wohlstadter opposes the motion on the sole basis that the forum-selection clause in Section 10.5 of the underlying Vaccines Asset Transfer Agreement ...


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