UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant To Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No.      )

Filed by the Registrant S

Filed by a Party other than the Registrant £

Check the appropriate box:

£ Preliminary Proxy Statement

£ Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

£ Definitive Proxy Statement

S Definitive Additional Materials

£ Soliciting Material Under § 240.14a-12

 

DELCATH SYSTEMS, INC.

 

	(Name of Registrant as Specified In Its Charter)
	(Name of Registrant as Specified In Its Charter)

 

Payment of Filing Fee (Check the appropriate box):

S No fee required.

£ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

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£ Fee paid previously with preliminary materials.

£ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number or the form or schedule and the date of its filing.

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(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:

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			68TVDELC                                                                    Conference

1			to get 51 percent of the vote or else we lose. We aren’t
2			fairly restrained in that respect.
3			THE COURT: I didn’t understand what you just said to
4			me.
5			MR. HECHT: Here’s the point: They don’t need to
6			gather 51 percent revocations. We need to gather 51 percent
7			consents.
8			THE COURT: Right.
9			MR. HECHT: So you can’t just say both sides are
10			barred from taking action on the consents. They don’t have to
11			take action on the revocations. We’re the ones who have to
12			take action. We bear a greater burden in the consent
13			solicitation process. So the very nature of the restraint,
14			even if it purports to be bilateral, covering both sides,
15			impacts us more profoundly.
16			THE COURT: So what? What’s the harm? That’s the
17			point.
18			MR. HECHT: Here’s the greater harm: They are the
19			incumbent board of directors; they can make changes; they can
20			do extraordinary things right now that we cannot. They’ve done
21			one already, Judge. They’ve changed the change-in-control
22			provision which runs the risk of giving a greater package to
23			management if there’s a change in control. That didn’t used to
24			exist.
25			THE COURT: When was that?

SOUTHERN DISTRICT REPORTERS, P.C.
(212) 805-0300

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			24
			68TVDELC                                                                    Conference
1			MR. HECHT: I’m sorry?
2			THE COURT: When?
3			MR. HECHT: We first learned of that in their first
4			preliminary consent revocation materials on August 7th.
5			THE COURT: What about that?
6			MR. OFFENHARTZ: Your Honor, I don’t know the exact
7			timing of that, but --
8			THE COURT: Recently is the answer.
9			MR. OFFENHARTZ: Recently. Your Honor, if I may, two
10			responses to that:
11			One, that really highlights the difference between
12			what my adversary is talking about and what we are talking
13			about. If they win, if at the PI hearing your Honor decides
14			that our claims are not correct or we’re wrong, and there was a
15			change, something happened that was inappropriate, the new
16			board can take steps to correct that. That’s a normal
17			run-of-the-mill process. That’s something that can be
18			addressed, addressed quickly, corrected.
19			Moreover, your Honor, we are not here trying to gain
20			anything. We are here because we believe we have very serious
21			issues to be dealt with. While I find it odd that they, in
22			effect, are moving for a TRO without actually putting in any
23			papers, without making any showing, without --
24			THE COURT: You mean as to you?
25			MR. OFFENHARTZ: As to us. I think that procedurally

SOUTHERN DISTRICT REPORTERS, P.C.
(212) 805-0300

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				25
			68TVDELC	Conference
1			that doesn’t make sense, and it’s faulty and it’s flawed.
2			By the same token, we are not trying to game the
3			system. And if the concern is that with a TRO in place we
4			would change the rights plan, I will stipulate right now that
5			during the pendency of the TRO leading up to the PI hearing
6			Delcath will not alter the rights plan. I think that’s a red
7			herring, your Honor. It’s not going to happen.
8			Moreover, your Honor, the adversary’s position is that
9			because they initiated a consent solicitation, and because
10			Delcath is asserting its rights under the securities laws, and,
11			frankly, to this date I’m not even sure why we’re talking about
12			balance of hardships, because with undisputed factual record
13			before the Court, I think we went on likelihood of success of
14			merits. So balance of the hardships is irrelevant for today’s
15			purposes.
16			But even with that in place, their whole view is that
17			because they have initiated a consent, anything we do under the
18			securities laws, by asserting the private right of actions
19			under 13d and 14a that are Horn Book securities law, and by
20			asserting or our rights under the list of cases that we’ve
21			provided your Honor, they’re saying that’s irreparable harm.
22			As your Honor noted, all they are going to be hit
23			with, if anything, is some additional expense. And as to
24			resetting the clock in the Pabst case that we cite, it was
25			clear that resetting the clock and having a new record date is

SOUTHERN DISTRICT REPORTERS, P.C.
(212) 805-0300

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26  

			68TVDELC                                                                   Conference
1			fine. That’s the cost of doing business.
2			THE COURT: Okay.
3			MR. HECHT: If I may, Judge. The point is this:
4			We’re not necessarily here to seek a countervailing TRO that
5			binds the management even more than they currently are. My
6			point is it’s a reductio ad absurdum.
7			If you just continue the restraints in their existing
8			form, while ostensibly it may appear to be keeping the playing
9			field neutral, it does not.
10			Two things happen: It leaves management pre -- to
11			possible mischief. I just gave the poison pill as one example.
12			The change of control is a real example, but they are still
13			free to do that. That’s why a mere continuation of the
14			existing restraints is not as innocuous as it seems. It was
15			when Judge Walton did it ten days ago, but we are farther along
16			in the process now.
17			THE COURT: I don’t get the difference.
18			MR. HECHT: Because then we didn’t start the process
19			yet. Now we have the process in place. Shareholders don’t
20			think their votes count. The footnote that Judge Keenan
21			addressed, the Management Assistance, makes the point very
22			well, too.
23			THE COURT: But there’s no real record support for
24			that at this point.
25			MR. HECHT: We proffer the affidavit of Mr. Ladd is

SOUTHERN DISTRICT REPORTERS, P.C.
(212) 805-0300

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27  

			68TVDELC                                                                     Conference
1			obviously --
2			THE COURT: Which is --
3			MR. HECHT: He’s spoken to shareholders, and he
4			understands people are withholding their vote.
5			But if I may move to two other quick points, Judge.
6			That’s our point is, if I wore the black robe, I
7			respect the idea that the first thing I want to do is keep the
8			playing field level, preserve the status quo until we get to a
9			hearing.
10			What I am urging your Honor to consider is it is not
11			so innocent to purportedly preserve the status quo by
12			continuing the restraints, because we submit the current status
13			quo presents a cloud on our ability to get votes.
14			What I propose we do --
15			THE COURT: Wait a minute. Why shouldn’t there be a
16			cloud on your ability to get votes if I find that they are
17			likely to prevail in demonstrating that the disclosures are
18			inadequate?
19			MR. HECHT: Two reasons. I’ll speak to the 13d point.
20			I don’t think they are likely to succeed on the merits. Let’s
21			assume, as your Honor just supposed, that you do find that,
22			then it’s still not too late. As Judge Weinfeld said, as Plant
23			Industries said, as Management Assistance said, as Poughkeepsie
24			said, to unscramble the transaction later, if, in fact, your
25			Honor finds that the disclosures were inadequate. It is simply

SOUTHERN DISTRICT REPORTERS, P.C.
(212) 805-0300

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Important Additional Information

On August 17, 2006, Laddcap filed a definitive consent solicitation statement with the SEC relating to Laddcap’s proposal to, among other things, remove the current Board of Directors and replace them with Laddcap’s nominees. In response, on August 21, 2006, Delcath filed a definitive consent revocation statement on Form DEFC14A (the “Definitive Consent Revocation Statement”) with the SEC in opposition to Laddcap’s consent solicitation. Delcath shareholders should read the Definitive Consent Revocation Statement (including any amendments or supplements thereto) because it contains additional information important to the shareholders’ interests in Laddcap’s consent solicitation.

The Definitive Consent Revocation Statement and other public filings made by Delcath with the SEC are available free of charge at the SEC’s website at www.sec.gov. Delcath also will provide a copy of these materials free of charge upon request to Delcath Systems, Inc., Attention: M.S. Koly, President and Chief Executive Officer, (203) 323-8668.

 

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