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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: MAY 28, 1998
(Date of earliest event reported)
CORTECH, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-20726 84-0894091
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6850 N. BROADWAY, SUITE G, DENVER, COLORADO 80221
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 650-1200
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ITEM 5. OTHER EVENTS.
On May 28, 1998, Bert Fingerhut, Chairman of the Board of Directors and
Acting Chief Executive Officer of Cortech, Inc. ("Cortech"), sent a letter to
Paul O. Koether of Asset Value Fund Limited Partnership. A copy of the letter,
which is attached to this Report as Exhibit 99.1, is incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
Exhibit No. Description
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99.1 Letter dated May 28, 1998, from Bert Fingerhut, Chairman of the
Board of Directors and Acting Chief Executive Officer of Cortech,
to Paul O. Koether of Asset Value Fund Limited Partnership.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: May 29, 1998 CORTECH, INC.
By: /s/ Diarmuid F. Boran
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Diarmuid F. Boran
Chief Operating Officer
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INDEX TO EXHIBITS
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Exhibit
Number Description
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99.1 Letter dated May 28, 1998, from Bert Fingerhut,
Chairman of the Board of Directors and Acting Chief
Executive Officer of Cortech, to Paul O. Koether of
Asset Value Fund Limited Partnership.
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EXHIBIT 99.1
Letter dated May 28, 1998, from Bert Fingerhut, Chairman of the Board of
Directors and Acting Chief Executive Officer of Cortech, to Paul O. Koether of
Asset Value Fund Limited Partnership.
May 28, 1998
Via Fax (908-234-9355) and FedEx
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Mr. Paul O. Koether
Asset Value Fund Limited Partnership
376 Main Street
P.O. Box 74
Bedminster, New Jersey 07921
Re: Cortech, Inc.
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Dear Mr. Koether:
As I indicated during our two telephone conversations on Monday and Tuesday
of this week, I am disappointed by your stated position that no purpose would be
served by a meeting amongst yourself, Cortech Board member Charles Cohen and me
unless the Cortech Board of Directors first capitulates on four demands of Asset
Value Fund Limited Partnership (which are outlined below). Your response is
particularly troublesome since (i) I indicated that each of your demands is an
appropriate subject for discussion, and that the Cortech Board is open on how
best to accommodate the legitimate interests of all stockholders, and (ii) your
demands appear to have doubled within a very short period (I.E., as reported to
me, you identified only TWO firm demands in your last conversation with Kenneth
Lynn, formerly Cortech's Chairman and CEO, a little over two weeks ago).
To recount the circumstances of our discussion, last week a representative
of Cortech's special counsel contacted one of your lawyers, indicating that I
would be calling you this week. The announced purpose of my call was to
initiate discussion of a potential slate of nominees for election to the Cortech
Board. As you know, the current Board embraces your call for stockholder
democracy and has a genuine interest in avoiding a costly proxy fight.
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In our first conversation this week, you identified the following four
demands which must be met before you would agree to a meeting:
(1) Election of three representatives of Asset Value Fund to the Cortech
Board (constituting a majority of the current five-person Board);
(2) Elimination of the current classification of the Cortech Board (thus
opening all Board positions to election at each Annual Meeting of
Stockholders);
(3) Provision of the right for any ten percent stockholder to call a
special meeting of Cortech's stockholders; and
(4) Elimination of Cortech's stockholder rights plan (which presently acts
to prevent a stockholder, or any group of stockholders acting
together, absent prior approval from and action by the Cortech Board,
from owning more than 15% of Cortech's stock).
I did not agree to requests (1), (3) or (4) during our conversations, and I do
not so agree now.
However, I did acknowledge a willingness to discuss an overall
RECONSTITUTION of the Cortech Board at the forthcoming Annual Meeting of
Stockholders, as well as a declassification of the Board, and I hereby reaffirm
such willingness. A reconstituted Cortech Board, following the Annual Meeting,
COULD THEN EXAMINE YOUR DEMANDS, as well as the broad range of issues facing
Cortech, and embark on whatever course the new Board felt best served the
legitimate interests of all stockholders.
As I told you, several substantial stockholders I have spoken with do not
endorse your demands. However, I tried to explain to you that all of the
subjects you have raised are open for discussion. I also made it clear that the
present Cortech Board has neither a desire to perpetuate unduly its influence
over Cortech's destiny nor a willingness to expend needlessly substantial sums
in a counter-productive proxy fight. Nonetheless, you were unmoved in your
insistence that no meeting would occur without an immediate and unconditional
capitulation with respect to your demands.
After our first conversation on Monday, I called you back on Tuesday in a
further attempt to engage you in a meeting with Charles Cohen and me (I'm not
used to groveling, but on behalf of Cortech's best interests I believe I did).
You again refused to meet, absent prior capitulation on your four demands. This
is unfortunate since I believe we might have accomplished a great deal.
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Since you have refused to meet with representatives of the Cortech Board,
let me tell you, in writing, some of what Charles and I would have reviewed with
you at a meeting:
- First, as I've indicated above, we could agree that (i) ALL Cortech
directorships be opened for election this year and (ii) the Cortech
Board could reasonably be declassified by amendment of the Cortech
Certificate of Incorporation;(1) and
- Second, the Cortech Board could agree on a slate of nominees for the
reconstituted Cortech Board which would be filled by individuals
representing significant stockholder constituencies.
I think the foregoing positions epitomize the "stockholder democracy" you have
espoused.
Again, aside from these positions, I strongly think the balance of your
demands are better left for resolution by a reconstituted Cortech Board.(2)
Having tried to engage you in a dialogue over what appeared to be our mutual
desire to provide significant stockholder constituencies, such as Asset Value
Fund, with appropriate representation on a reconstituted Cortech Board, we are
prepared to let your devout interest in stockholder democracy, like ours,
determine the course of future events.
Very truly yours,
/s/ Bert Fingerhut
Bert Fingerhut, Chairman
cc: Charles Cohen, Ph.D., Cortech Board Member
Donald Kennedy, Ph.D., Cortech Board Member
Allen Misher, Ph.D., Cortech Board Member
David Snyder, Pillsbury Madison & Sutro LLP
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(1) As you know, amendment of the Cortech Certificate of Incorporation requires
action by the Cortech Board of Directors AND the Cortech stockholders.
(2) While the Cortech Board believes that the stockholder rights plan and
limitations on the category of parties able to call a stockholder meeting can
and have served the interests of stockholders broadly (as opposed to the
interests of only a few stockholders), the Cortech Board can understand how a
reconstituted Board, under certain circumstances, could see its way to
eliminating the stockholder rights plan and/or expanding the category of parties
able to call a stockholder meeting.
