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Guidant asks for breakup fee refund
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Boston Scientific Corporation's Guidant unit has told a federal judge in New York that Johnson & Johnson may be required to return a $705 million fee paid to it after a scuttled merger.
Guidant, a medical-device maker with operations in Maple Grove, Plymouth and Arden Hills, paid the termination fee after it dropped the planned union and agreed instead to be acquired by Boston Scientific for $27.5 billion. Last year, Johnson & Johnson sued for $5.5 billion in damages.
Guidant last week filed a "contingent" counterclaim in federal court in New York. The company said that it didn't breach the contract and that Johnson & Johnson suffered no harm. In the event the judge rules it did breach the deal, Guidant argued that it isn't obligated to pay the termination fee and that New Brunswick, N.J.-based Johnson & Johnson should refund it.
In that event, "J&J's sole remedy is limited to the recovery of damages it suffered (if any) as a result of Guidant's breach," Guidant said in its counterclaim.
A Johnson & Johnson spokesman declined to comment.
In December 2004, Johnson & Johnson agreed to buy Guidant for $25.4 billion. After Guidant recalled 109,000 heart defibrillators linked to seven deaths, J&J reduced its offer to $21.5 billion in October 2005. Johnson & Johnson claimed in the lawsuit that the agreement barred Guidant from soliciting other offers or providing confidential information to another company.
In December 2005, while the merger awaited regulatory review, Boston Scientific made a $25 billion bid for Guidant. Johnson & Johnson claims in its suit that Guidant improperly allowed Abbott Laboratories to review its finances to see whether Abbott would agree to buy some of its businesses in the event Boston Scientific's bid won out.
Boston Scientific acquired Guidant in April 2006.
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