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A Manhattan federal judge on Monday carved down—but refused to kill—a high-stakes lawsuit accusing Bristol-Myers Squibb of deliberately stalling FDA approvals to avoid paying $6.7 billion owed to Celgene shareholders after the companies’ blockbuster 2019 merger.

Court Says Trustee Has Standing

In a mixed ruling, U.S. District Judge Jesse M. Furman rejected Bristol-Myers Squibb’s attempt to toss the case for lack of subject-matter jurisdiction, while simultaneously pruning portions of the complaint for failure to state a claim.

The judge held that UMB Bank—which brought the suit as trustee for Celgene investors—has standing, concluding the bank was “properly appointed” following a judicially ordered reconfirmation process.

That decision is a sharp pivot from September 2024, when Judge Furman tossed the previous version of the 3-year-old dispute, finding UMB had not correctly replaced Equiniti Trust Co. as trustee under the contingent value rights (CVR) agreement tied to the $74 billion Celgene acquisition.

Second Attempt Clears Jurisdictional Bar

Furman previously signaled that a renewed lawsuit filed by a properly appointed trustee might return the case to its earlier posture—and UMB did just that, rolling out a new complaint in November 2024.

This time, the court rejected Bristol-Myers’ argument that the CVR agreement’s successor-trustee provisions had expired with the contract’s automatic termination on Jan. 1, 2021. Furman found that while the survival clause does not explicitly include that section, it survives implicitly because it is essential to enforcing related provisions.

Key Claims Move Forward

Though the court trimmed the lawsuit, the core allegations remain intact.

Judge Furman preserved count one, seeking a declaratory judgment establishing UMB as the rightful trustee, and count two, a breach of contract claim that the judge already allowed to proceed in the earlier round of litigation.

Implied Covenant Claim Survives

The court also let stand count four, which accuses Bristol-Myers of breaching the implied covenant of good faith and fair dealing—a claim that speaks to the heart of UMB’s allegation that the company intentionally slow-walked FDA approvals, including for a cancer therapy.

Two Claims Dismissed

The judge, however, dismissed count three, alleging breach of contract for failure to maintain a security register, ruling that the relevant provision did not survive termination of the CVR agreement.

He also struck count five, which sought a declaratory judgment that certain CVR conditions requiring beneficial holders to obtain proxies should be excused. The judge found that count five collapses because it depends entirely on the now-dismissed count three.

Attorneys on the Record

Lawyers for both sides did not immediately respond to requests for comment.

UMB Bank is represented by David A. Crichlow and Julia M. Winters of Katten Muchin Rosenman LLP, and Joshua S. Margolin, Korey Boehm, Maria Ginzburg, Meredith Nelson, Sean Baldwin, and Philippe Z. Selendy of Selendy Gay PLLC.

Bristol-Myers Squibb is represented by John J. Clarke Jr. and Jessica Masella of DLA Piper.