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LAVAL, Quebec—Bausch Health Companies Inc. (NYSE/TSX: BHC) said this week that the parties in a securities class action filed in U.S. District Court for the District of New Jersey have agreed to resolve the action for $1.21 billion, subject to court approval. Once approved by the court, the settlement of this action, which has been referred to as the “Valeant stock drop” case, will resolve and discharge all claims against the company, according to an announcement. “Resolving this action enables Bausch Health to close the door on one of the more meaningful and unpredictable liabilities associated with the legacy Valeant era,” Bausch Health chairman and CEO Joseph C. Papa said in the announcement.

“The settlement of this case removes a cloud of uncertainty and ensures that current and future stakeholders will enjoy the benefits of the ongoing transformation of Bausch Health.”

As part of the settlement, the company and the other settling defendants admit no liability and deny all allegations of wrongdoing whatsoever, according to the announcement.

The agreed settlement timing includes a payment schedule with the first funding in mid-January 2020. Bausch Health said it intends to use a combination of sources to fund the settlement, which may include cash on hand, its revolving credit facility and potentially accessing capital markets.

Bausch Health said it believes that the settlement marks an important step in its transformation and “will not diminish its ability to continue to invest in its businesses.” In addition, the company said the settlement does not impact the company's current 2019 financial guidance.