Aurobindo Pharma on Thursday said Plethico Pharma, the previous owner of Natrol Inc, has agreed to assign $23.3 million in cash in addition to certain global IP rights and other assets to settle financial fraud accusations leveled by Aurobindo's US affiliate.
"Natrol LLC, owned by Aurobindo, had approached the Delaware Bankruptcy Court on April 6, 2015 in respect of acquisition of assets of Natrol, USA regarding certain discrepancies and nonperformance of obligations by erstwhile owners, Plethico. Subsequently, discussions were held between Natrol LLC and Plethico group for resolution," the company said in a stock exchange filing.
Based on the discussions, a settlement agreement has been reached, wherein Plethico group would assign $23.3 million in cash in milestone payments, certain global IP rights and other assets, Aurobindo said in a statement.
Aurobindo Pharma's wholly owned subsidiary, Aurobindo Pharma USA, had emerged as the highest bidder for acquisition of Natrol Inc, USA under a process approved by United States Bankruptcy Court for the District of Delaware. This deal was notified on 12 November, 2014.
The acquisition, which was completed in December, 2014, included manufacturing assets, personnel, commercial infrastructure etc besides nutraceutical brands in USA of Natrol along with an agreement to take certain liabilities with a bid of $132.5 million.
Out of these liabilities, Aurobindo's US subsidiary pointed out certain financial discrepancies amounting to fraud involving a $25 million contract with a fictitious construction company among other things. With the stated agreement, Aurobindo would be able to reduce the liabilities it had agreed to take as a part of the acquisition deal for Natrol.
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