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Famed inventor Dr. Julio Palmaz settles lawsuits over failed company

September 27, 2018

Famed inventor Dr. Julio Palmaz and other insiders of the failed San Antonio medical technology company that bore his name have settled disputes involving allegations of fraud and securities-law violations.

Terms of the settlement with former Palmaz Scientific Inc. shareholders and a trustee are confidential, but a bankruptcy judge recently approved settlement payments from two insurers who provided directors and officers liability insurance coverage for Dr. Palmaz and other insiders. The two policies had $8 million in combined coverage.

It couldn’t be determined if the plaintiffs collected anything directly from company insiders.

Calls to Jason Davis, Dr. Palmaz’s lawyer, attorneys for other company officials and trustee Milo Segner Jr. were not returned Wednesday. Palmaz Scientific’s directors included Phil Romano, the restaurateur who founded national chains Romano’s Macaroni Grill and Fuddruckers.

Ryan Steinbrunner, a Dallas attorney who represents a group of about 12 shareholders, said he was limited in what he could say because of the confidentiality agreement. “I can tell you that the clients we represent are happy to have this all behind them,” he said.

Justin Bryan, a Dallas lawyer for about 40 investors, didn’t respond to a request for comment.

State District Judge Maricela Moore in Dallas County dismissed the parties’ claims — including those by Dr. Palmaz and two other insiders — Sept. 13 after they were resolved, court records show.

Palmaz Scientific was started about 10 years ago by Dr. Palmaz, who in the 1980s invented a heart stent credited with saving millions of lives. The stent, developed at the University of Texas Health Science Center at San Antonio, helps prevent blood vessels from collapsing after a balloon angioplasty opens clogs. Johnson & Johnson bought the rights to the stent in 1988, reportedly paying about $500 million.

Palmaz Scientific set out to develop the next generation of arterial stents, but those efforts flopped despite raising roughly $40 million from investors.

To read more about Palmaz Scientific, see Thursday’s Business section or click here to visit our subscriber website, ExpressNews.com.

Patrick Danner is a San Antonio-based staff writer covering banking and civil courts. Read him on our free site, mySA.com, and on our subscriber site, ExpressNews.com. | pdanner@express-news.net | Twitter: @AlamoPD

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