Sun Pharmaceutical Industries prohibited to purchase additional Taro shares while temporary injunction remains in effect

Supreme Court Decisions

In September 2008, as part of an appeal filed by Taro and certain members of its Board of Directors, the Supreme Court granted a temporary injunction prohibiting Sun from closing its tender offer to purchase Taro shares until the Court renders a judgment, and ordered that the status quo with respect to Taro be maintained until that judgment is rendered.

In December 2009, Sun attempted to exercise a warrant to purchase approximately 3.7 million additional Taro shares at $6.00 per share. Taro notified Sun that exercise of the warrant was contrary to the temporary injunction. Sun asked the Supreme Court to rule that the temporary injunction does not prohibit the exercise of the warrant.

In its decision, the Supreme Court ruled that the purpose of the temporary injunction is to maintain the status quo until a judgment on the appeal is rendered and prohibited Sun from exercising the warrant. Taro voluntarily agreed to grant an appropriate extension to the term of the warrant in the event that the Supreme Court decides the appeal after expiration of the warrant.

In another decision rendered in the same case, the Supreme Court ruled that Franklin Templeton Investments, who had requested to withdraw their appeal, must remain a party to the proceedings as a respondent.

District Court Decisions

These decisions of the Supreme Court follow two favorable decisions for Taro and its Directors in the Tel Aviv District Court which struck out almost all of the remedies sought by Sun in a lawsuit previously brought by Sun against the Company and its Directors with respect to its financial statements.