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The arbitration procedure between Marc Coucke, the investment fund Waterland and the pharmaceutical giant Perrigo will start on Monday. Due to the corona pandemic, this is done with a few months delay and completely digitally.
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Normally the proceedings between Coucke, Waterland and Perrigo had to start at the end of March before the arbitration court Cepani. But the corona crisis prevented that. On Monday – provided a covid cancellation in the coming hours – is the day after all.
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What is the matter about?
The procedure revolves around the sale of Omega Pharma to Perrigo at the beginning of 2015. The Americans put EUR 3.8 billion on the table to recruit the Flemish specialist in prescription-free medicines. The sellers? Marc Coucke and a financial consortium led by Waterland.
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Perrigo felt cheated after the takeover. It accuses Coucke and Waterland of fraudulently presenting Omega Pharma’s finances in order to negotiate a higher selling price. According to Perrigo, they created artificial sales and steered Omega Pharma’s debt position. Coucke and Waterland deny that they misled Perrigo.
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What does Perrigo demand?
The American pharmaceutical giant filed a claim for no less than 1.9 billion euros against Coucke and Waterland. Coucke filed a counter-claim. He is demanding compensation from Perrigo because he believes that the pharmaceutical group did not act in good faith in the acquisition of Omega Pharma. It is not known what amount he is demanding from the Americans. Waterland, which is led by the Belgian Frank Vlayen, did not submit a counter claim.
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Which court is hearing the case?
The dispute is being fought before the Cepani (in full the Belgian Center for Arbitration and Mediation). It was founded a little over 50 years ago within the Federation of Belgian Enterprises (FEB) and is still located there. Arbitration proceedings before Cepani are strictly confidential, unlike court proceedings which are usually open to the public.
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Who will consider the matter?
The board of arbitrators consists of three members: Jan Meyers, Johan Verbist and Jean-Pierre Fierens (chairman). All three are seasoned top lawyers. Jan Meyers was nominated by Marc Coucke and Waterland, Johan Verbist by Perrigo. They chose Jean-Pierre Fierens as chairman.
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Fierens – whose client included Maurice Lippens (ex-Fortis) – is the former CEO of the law firm Stibbe and is now the litigation specialist of the law firm Strelia. Meyers is one of the top lawyers in Cleary Gottlieb’s Brussels office and has advised, among others, the Belgian federal government on numerous cases. Johan Verbist For some time he headed the De Bandt office and was subsequently a partner at Linklaters. He founded the Verbist en Vanlerberghe (Omega Law) office seven years ago.
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The arbitrators try to reach a consensus. If that fails, the chairman has a casting vote. No appeal is possible. As usual with Cepani, the parties have already had to submit a percentage of the amount of the claim. That should cover the costs of the case.
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How long will the debates last?
Pleas should last four to six weeks. Given the corona pandemic and travel restrictions, everything will be done digitally. This long duration is not surprising. The conclusions of the two parties are said to cover several thousand pages together, and on top of that, expert reports of several thousand pages and witness statements were to be added.
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A final decision will not be made until next year at the earliest, six years after the sale of Omega Pharma.
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Dividends keep pouring in
Despite the legal conflict between Perrigo and Coucke, the Flemish entrepreneur continues to receive dividends from the American pharmaceutical giant.
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Coucke became Perrigo shareholder in 2015 following the sale of Omega Pharma. He then received 600 million euros in cash plus 5.4 million Perrigo shares. After the takeover, Coucke was obliged to keep those shares in portfolio for several years. As far as is known, he has not (yet) sold them. That is not surprising: Perrigo’s share price collapsed since the takeover and Coucke is currently facing a substantial paper loss on his participation.
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If one takes into account all the dividends paid by Perrigo since the completion of the acquisition of Omega Pharma in 2015, the amount for Coucke amounts to just under 22 million dollars or 18.56 million euros.
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