Quarterly report pursuant to Section 13 or 15(d)

Commitments and Contingencies

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Commitments and Contingencies
9 Months Ended
Sep. 30, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
In the normal course of business, Synergy is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, product and environmental liability, and tax matters. In accordance with FASB ASC Topic 450, Accounting for Contingencies (“ASC Topic 450”), Synergy records accruals for such loss contingencies when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. Synergy, in accordance with this guidance, does not recognize gain contingencies until realized. We describe our legal proceedings and other matters that are significant or that we believe could become significant in this footnote and in Note 7, Commitments and contingencies, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2017.

Certain recent developments concerning our legal proceedings are discussed below:

Litigation
 
On February 8, 2018, a federal securities action, captioned David Lee v. Synergy Pharmaceuticals Inc. et al., was filed in the U.S. District Court for the Eastern District of New York. Two similar, related lawsuits—Eileen Countryman v. Synergy Pharmaceuticals Inc. et al. and Wendell Rose v. Synergy Pharmaceuticals Inc. et al—were subsequently filed in the same court. On June 11, 2018, plaintiffs voluntarily dismissed the Countryman complaint. On June 22, 2018, the court consolidated the remaining Lee and Rose actions into a single action under the caption In re Synergy Pharmaceuticals, Inc. Securities Litigation. On August 31, 2018, plaintiffs in the consolidated action filed a consolidated amended complaint that seeks to recover on behalf of a putative class of purchasers of Synergy’s common stock between November 10, 2016 and November 13, 2017. The consolidated amended complaint alleges that the Company and certain of its officers and directors made false and misleading statements, including in connection with the Company's Term Loan from CRG Servicing, LLC and in connection with Trulance’s side-effect profile. The consolidated amended complaint asserts claims under the federal securities laws and seeks to recover unspecified damages, legal fees, interest, and costs.

On April 20, 2018, a shareholder derivative action captioned Solak v. Jacob et al. was filed in the Supreme Court of the State of New York for New York County. Three substantially identical shareholder derivative actions, captioned Ecker & Klein v. Jacob et al., Harding v. Jacob et al., and Buker v. Jacob et al., were subsequently filed in the same court. On June 19, 2018, the court consolidated these four actions into a single action captioned Solak v. Jacob et al. On September 28, 2018, plaintiffs in the consolidated action filed a consolidated amended complaint that names Synergy’s directors and certain of its officers as defendants, as well as the Company itself as nominal defendant, and seeks to recover on behalf of the Company. It asserts claims for breach of fiduciary duty, unjust enrichment and gross mismanagement, alleging that the individual defendants caused the Company to issue allegedly false and misleading statements in connection with the Term Loan and Trulance’s side-effect profile. The consolidated amended complaint seeks to recover unspecified damages on behalf of the Company, as well as declaratory relief, equitable remedies, costs, and expenses.
On June 8, 2018, a shareholder derivative action captioned Davydov v. Hamilton et al. was filed in the U.S. District Court for the Eastern District of New York. The complaint names Synergy’s directors and certain of its officers as defendants, as well as the Company itself as nominal defendant, and seeks to recover on behalf of the Company. The complaint alleges that the individual defendants violated the federal securities laws and breached their fiduciary duties to the Company by causing it to issue allegedly false and misleading statements in connection with the Term Loan, Trulance’s side-effect profile, and the responsibilities of the Company’s directors. The complaint also asserts claims for waste of corporate assets and unjust enrichment based on the same allegations. The complaint seeks to recover unspecified damages on behalf of the Company, as well as equitable remedies, costs, and expenses.  

In the Company’s opinion, a loss in connection with the matters described above is neither probable nor estimable.