DOVER, Del.--(BUSINESS WIRE)--Sharon Hawkins and MedApproach, L.P., a Delaware limited partnership that controls Danco, the business enterprise formed to manufacture, market and distribute the oral abortion drug RU-486, more commonly known as Mifepristone, in the United States, recently secured a significant win in its litigation with Bradley Daniel of MedApproach Holdings, Inc. On January 24th, the Delaware Supreme Court decisively affirmed the Court of Chancery’s determination that a control block of the enterprise’s stock can be sold free-and-clear of an irrevocable proxy held by Daniel. The control block must be sold as a result of the MedApproach liquidation, which means that Daniel’s quarter century of captive control over the enterprise – and the extremely lucrative compensation he receives as a proxy holder – should soon come to an end.
The pair of Delaware court rulings follow decades of unnecessarily protracted litigation over the various ways Daniel was extracting financial benefits through his ultimate control of the enterprise. Not only is the irrevocable proxy the fulcrum of Daniel’s control over the enterprise; it is also the largest funnel through which he draws funds from the enterprise. During his tenure, Daniel has collected at least $10.3 million in proxy fees on top of his annual salary, which exceeds $300,000. Daniel also receives $3,000 for each day he spends litigating, which may account for the litigious atmosphere that has plagued the enterprise during his tenure. Daniel also receives reoccurring revenue through an entity he controls that leases office space to related MedApproach ventures.
Following a single-day trial in late 2021, the Delaware Court of Chancery entered a judgment in favor of Ms. Hawkins and rejected Daniel’s claim that the Partnership’s control block of stock must be sold subject to Daniel’s irrevocable proxy. This ruling effectively signals the death knell to Daniel’s quarter century of control over the enterprise, which is good news for women’s access to health care because it means that – following a sale of control and Daniel’s removal from office – the enterprise will benefit from a traditional management structure and more effective product delivery.
“I am pleased with the Chancery Court’s ruling, which removes Mr. Daniels’ stranglehold on the company my husband and I funded more than 25 years ago,” said Sharon Hawkins, majority owner of MedApproach, L.P. “We are now able to clearly envision a future for MedApproach that prioritizes women’s health over individual wealth. Because of the Court’s decisive ruling, MedApproach will now be able to march boldly into the future with responsible corporate governance in place for the first time in its over two-decade existence. Finally, we will be able to move forward with the formation of a legitimate Board of Directors to guide the company’s activities, comprised of ethical, principled individuals who deeply care about or are experts in women’s health. This ruling enables and upholds our vision for the future direction of MedApproach.”
For more than 25 years, the Hawkins family has focused on making mission-aligned investments in the areas of women’s health, animal rights, and local causes. MedApproach was funded more than 20 years ago by experienced investor Greg Hawkins, and its majority owner is entrepreneur and philanthropist Sharon Hawkins. In 2000, the U.S. Food and Drug Administration approved mifepristone for sale in the United States.