The father and son who head A.H. Robins Co. have agreed not to block a merger that could enable the company to pay off its creditors and emerge from bankruptcy.
Chairman E. Claiborne Robins and President E. Claiborne Robins Jr. signed an agreement with Rorer Group Inc. to satisfy a federal judge who recommended that they resign because of a conflict of interest in merger talks between Rorer and Robins Co. Wednesday, U.S. District Judge Robert R. Merhige Jr. had warned the Robinses he would take unspecified remedial action if they did not either resign or settle a dispute over the Rorer stock that they would receive in the merger.
A Robins press release said the agreement sets out "certain conditions relating to the Rorer stock the Robinses would receive," and that once court approval is obtained, the merger pact would be signed by officers of the two pharmaceutical companies.
The stockholder agreement is to protect Rorer against the possibility that the Robins family could use its huge block of Rorer shares to try to win control of Rorer, or to sell the shares to someone who would attempt a takeover.
The Robinses wanted to be free to sell their stock to raise cash in case they face personal lawsuits from victims of the Dalkon Shield, the defective contraceptive that forced the company into bankruptcy.
At the court hearing Wednesday, Merhige said the Robinses had a conflict in obstructing the reorganization to protect their personal financial interests.
Yesterday, Murray Drabkin, counsel to the Dalkon Shield Claimants Committee, said, "Having held the company hostage to protect their personal interests, the Robins family has now done the only thing they could do -- they released the hostage."
The Robins family owns 42 percent of the stock in their Richmond company, valued at about $274 million. Under federal bankruptcy law, the duty of the company's officers and directors is not to its stockholders, but to its creditors. Those creditors are mainly Dalkon Shield victims. Currently, those whose notices of claims have survived court screening number about 214,000.