–Julio Palmaz hasn’t been able to recreate his earlier success
A company founded by stent pioneer Julio Palmaz has declared bankruptcy and is being investigated for misconduct, according to the San Antonio Express-News.
Palmaz, along with Richard Schatz, was the inventor of the enormously successful Palmaz-Schatz stent marketed by Johnson & Johnson.
In March Palmaz Scientific, a company started by Palmaz, declared bankruptcy. Among the San Antonio company’s investors were the state of Texas, which had put $3 million into the company, and former Dallas Cowboys star Emmit Smith.
Now Palmaz Scientific is being sued by investors who say the company misrepresented itself by claiming that privately traded shares of the company were being offered by the investment banking firm Jefferies & Co. “The problem is that Jefferies was still listed in marketing materials as the placement agent after the broker-dealer severed its ties with Palmaz Scientific later that year,” writes Patrick Danner in the Express-News.
In addition to the bankruptcy and the lawsuit, Palmaz Scientific has disclosed in a bankruptcy filing that it is being investigated by the Securities and Exchange Commission.
Palmaz Scientific raised more than $40 million, largely on the basis of the founder’s history and reputation. As part of the bankruptcy proceedings a company owned by Palmaz’s wife, Amalia, submitted a “stalking-horse bid” to purchase the assets of the company. Lawyers for the investors suing the company claim this is “a way for the Palmazes to buy the assets at a discount,” according to the Express-News. The company said the sale would not “generate sufficient proceeds to provide a return” to shareholders. The US Trustee in the bankruptcy proceedings has objected to the plan.