Faruqi & Faruqi LLP - newshttp://www.faruqilaw.com/newsFaruqi & Faruqi LLP - newsFaruqi Firm Files Antitrust Case Over ADHD Medicationhttp://www.faruqilaw.com/news/show/id/153 On January 11, 2017, Faruqi & Faruqi, LLP filed a federal antitrust class action case against brand and generic manufacturers of ADHD drug, Intuniv.  The complaint alleges that the companies, Shire and Actavis, violated the antitrust laws by entering into an anticompetitive agreement that delayed generic competition for Intuniv.  Under the agreement, Shire effectively paid Actavis tens of millions of dollars to delay launching a generic version of Intuniv.  As a result, purchasers of Intuniv were forced to pay higher prices for the drug.  The case was filed in the United States District Court for the District of Massachusetts and is captioned as follows: Rochester Drug Co-Operative Inc. v. Shire LLC et al., Case No. 1:17-cv-10050.

Thu, 12 Jan 2017 00:00:00Alex Coviello
Faruqi & Faruqi files slack-fill case against Nestle’ U.S.A., Inc.http://www.faruqilaw.com/news/show/id/152 On January 3, 2017, Faruqi & Faruqi, LLP filed a federal consumer class action case against Nestle’ U.S.A., Inc. for allegedly under-filling its opaque theater box Raisinets products to the detriment of unsuspecting consumers. The case was filed in the United States District Court for the Central District of California, captioned Hafer v. Nestle’ U.S.A., Inc., No. 2:17-cv-00034.

Mon, 9 Jan 2017 00:00:00Alex Coviello
Faruqi & Faruqi files cases against generic drug manufacturershttp://www.faruqilaw.com/news/show/id/151 On December 27 & 28, 2016, Faruqi & Faruqi, LLP filed several cases against generic drug manufacturers for allegedly conspiring to raise the prices of generic divalproex ER, desonide, pravastatin, econazole, fluocinonide, levothyroxine, propranolol, and clobetasol. The firm represents classes of direct purchasers of the generic drugs and is seeking an award of triple damages under the Clayton Act. The cases were filed in federal court in Philadelphia. They are as follows: Case Nos. 2:16-cv-06645; 2:16-cv-06662; 2:16-cv-06644; 2:16-cv-06638; 2:16-cv-06639; 2:16-cv-06671; 2:16-cv-06672; 2:16-cv-06644. Collectively, the generic companies named are Dr. Reddy’s, Impax, Mylan, Par, Zydus, Actavis, Fougera, Perrigo, Sandoz, Sun, Taro, Apotex, Glenmark, Lupin, Teva, Teligent, Lannett, Endo, Heritage, Breckenridge, Upsher-Smith, Hi-Tech, and Wockhardt.

The cases follow a series of governmental investigations at the state and federal level, which led to two criminal indictments and a state attorneys general action. Faruqi & Faruqi also serves as counsel for the class in In re Generic Digoxin and Doxycycline Antitrust Litigation, Case No. 2:16-md-02724, an action previously filed against generic drug manufacturers in Pennsylvania federal court.

Fri, 6 Jan 2017 00:00:00Alex Coviello
Faruqi & Faruqi, LLP announces preliminary approval of settlement in In re Dynavax Technologies Corporation Securities Litigationhttp://www.faruqilaw.com/news/show/id/150 Faruqi & Faruqi LLP is pleased to announce that the Court has preliminarily approved a settlement in In re Dynavax Technologies Corp. Sec. Litig., Case No: 3:13-CV-02796-CRB.  The settlement provides for a cash payment of $4.5 million in exchange for plaintiffs’ release of all claims alleged in the action.  For more information regarding the settlement, please visit www.DynavaxSecuritiesLitigation.com.  The final fairness hearing is scheduled for February 3, 2017.

Fri, 16 Dec 2016 00:00:00Raul Mondragon
Faruqi & Faruqi, co-Lead Counsel, Obtains a Significant Victory on Behalf of Investors Against Comverge Inc.’s Former Board of Directorshttp://www.faruqilaw.com/news/show/id/148 On October 31, 2016, the Honorable Tamika Montgomery-Reeves, Vice Chancellor of the Delaware Court of Chancery, denied a motion for summary judgment filed by the former board of directors (the “Board”) of Comverge Inc. (“Comverge”).  In denying summary judgment, the Court found that there were material facts in dispute regarding whether Comverge’s shareholders were fully informed in approving the acquisition of Comverge by H.I.G. Capital, LLC’s (“H.I.G.”) in May 2012.  The Court also found that “a fuller development of the facts should serve to clarify the law or help the Court determine” whether certain debt-related agreements between Comverge and H.I.G. were, as a matter of law, unreasonable deal protection devices agreed to by the Board in bad faith.

The case is set for a three-day trial commencing on December 13, 2016.

Wed, 2 Nov 2016 00:00:00Alex Coviello
Faruqi & Faruqi, Lead Counsel, Obtains Final Approval of $3,000,000 Common Fund in In re Mavenir Systems, Inc. Stockholders Litigationhttp://www.faruqilaw.com/news/show/id/147 On October 12, 2016, the Honorable Tamika Montgomery-Reeves, Vice Chancellor of the Delaware Court of Chancery, granted final approval of the proposed settlement in In re Mavenir Systems, Inc. Stockholders Litigation, C.A. No. 10757-VCMR.  Faruqi & Faruqi, as lead counsel (“Lead Plaintiff”), obtained significant benefits to stockholders discussed below. The settlement established a $3,000,000 common fund that will be distributed to the stockholders of Mavenir Systems, Inc. (“Mavenir”).  The settlement arises from the acquisition of Mavenir by Mitel Networks Corporation (“Mitel”), which was announced on March 2, 2015, and closed on April 29, 2015. 

Before the deal closed on April 28, 2015, the parties agreed to a settlement where Defendants agreed to reduce the termination fee from $20.625 million to $8.4 million under certain circumstances; reduce the matching rights period from four business days to one business day; eliminate Mavenir’s obligations to notify Mitel about a superior offer from a third party; and release certain stockholders, collectively owning 45% of the company, from certain provisions in their tender and support agreements which required them to vote 22.5% of the company’s shares in favor of the transaction even if the company changed its recommendation to accept a superior proposal.  Taken together, these transaction term modifications opened up the sale process to effectively allow third party bidders.  Defendants also agreed to correct several material disclosure issues in Mavenir’s Recommendation Statement, including disclosure of the fact that Mavenir’s financial advisor held a 3.9% ownership stake in Mitel, a fact Mavenir’s board was previously unaware of.

During confirmatory discovery in support of the initial settlement, Lead Plaintiff discovered that the merger consideration was allegedly reduced by $0.06 per share in order to fund a retention plan benefitting certain Mavenir executives, including the company’s CEO.  Although rare in M&A litigation, Faruqi & Faruqi walked away from the initial settlement to further pursue the case based on the newly discovered information.
The parties ultimately agreed to mediate before the Honorable William B. Chandler, former Chancellor of the Delaware Court of Chancery, an experienced practitioner of Delaware’s corporate law.  After mediation and subsequent negotiations, the parties agreed to establish a $3,000,000 common fund, which would ultimately be distributed to Mavenir’s former stockholders. 

The $3,000,000 common fund is a significant win for Mavenir stockholders.  It is also an atypical result because the shareholders will receive more than the $0.06 per share purchase price reduction ($1,866,000) plaintiff believes resulted from misconduct by Mavenir’s former CEO.

Thu, 13 Oct 2016 00:00:00Alex Coviello
Faruqi & Faruqi Challenges Conflicted Merge Healthcare, Inc., Transactionhttp://www.faruqilaw.com/news/show/id/146 On September 27, 2016, Faruqi & Faruqi, LLP (“Faruqi”) presented a significant motion to dismiss argument before Vice Chancellor Glasscock in a case challenging IBM’s $1 billion acquisition of Merge Healthcare Inc. (“Merge”).  Derrick Farrell, a partner at Faruqi, argued that the transaction was mired with conflicts and meant to enable Merge’s controller and largest stockholder, Ferro, to cash out his $188 million Merge investment and receive a $15 million consulting fee.  Notably, Merge’s charter did not contain a so called “102(b)(7)” provision which exculpates directors from liability for the duty of care.  Vice Chancellor Glasscock observed that this was “unusual” and even questioned counsel for both parties regarding the number of times they had not seen a company employ such a provision.

During oral argument Mr. Farrell pointed out, among other disclosure deficiencies, that the proxy statement in connection with the merger gave the false impression Merge’s financial advisor, Goldman Sachs, used a lower set of projections than those disclosed in the proxy statement, when in fact Goldman Sachs used a higher set of projections that treated stock-based compensation as a non-cash expense.  Vice Chancellor Glasscock ultimately requested supplemental briefing on this issue, stating that it “would be very helpful in my understanding of whether that element of the disclosure claim is something that I need to take into account in doing the [ratification] analysis.”  Mr. Farrell further argued that the Board’s decision to provide Ferro a consulting agreement that gave him a $15 million payment if Merge was sold for at or over a $1 billion, when Ferro knew a transaction with IBM was likely was a breach of the fiduciary duty of care.  In Mr. Farrell’s words “I think we have demonstrated here gross negligence in the sale process, this is a board that allowed someone it knew was conflicted because of this consulting agreement to negotiate a deal.”   While Mr. Farrell conceded Ferro ultimately agreed to waive the $15 million consulting fee in exchange for IBM increasing the transaction consideration by $15 million, he argued that stockholders had already been irreparably damaged when the fee was waived because Ferro negotiated with IBM towards a $1 billion purchase price (the precise amount needed for his $15 million payment), that Ferro did not disclose why he agreed to waive the fee and stockholders were not told whether Ferro would waive the fee for any potential purchaser; a fact Ferro belatedly testified to after the merger agreement was signed during what Mr. Farrell described as “litigation-driven testimony.”  Indeed, as Mr. Farrell argued to the Court, rather than ask why Ferro would not waive the consulting fee for potential purchasers other than IBM “the better question is if a potential purchaser came up and said let’s do a deal at $1.1 billion, but, by the way, Mr. Ferro, you can keep your $15 million consulting fee, why wouldn’t he take the money?”

Faruqi & Faruqi expects a ruling from the Delaware Court of Chancery  on Defendants’ motion within the next several months.

Wed, 28 Sep 2016 00:00:00Alex Coviello
Court Grants Final Approval of Settlement in Chelsea Therapeutics International, Ltd. Securities Litigationhttp://www.faruqilaw.com/news/show/id/145 The Honorable Max O. Cogburn, Jr., United States District Judge for the Western District of North Carolina entered final approval of the settlement reached in McIntyre v. Chelsea Therapeutics International, Ltd., et al., No. 3:12-CV-00213-MOC-DCK (W.D.N.C.) for which Faruqi & Faruqi, LLP served as sole Lead Counsel on behalf of the Class.  The Order can be accessed through the link below.

Wed, 21 Sep 2016 00:00:00Alex Coviello
Faruqi & Faruqi, LLP Obtains Significant Victory On Behalf Of Investors Against ACADIA Pharmaceuticals Inc.http://www.faruqilaw.com/news/show/id/144 On September 19, 2016, United States District Judge Barry Ted Moskowitz denied a motion to dismiss filed by ACADIA Pharmaceuticals Inc. (“ACADIA”), former Chief Executive Officer (“CEO”) Uli Hacksell, current President and CEO Stephen R. Davis, and former Chief Medical Officer and Executive Vice President, Development Roger G. Mills (together “Defendants”).  The Court sustained claims alleging that the Defendants violated the federal securities laws by making materially false and misleading statements regarding the timing and status of ACADIA’s New Drug Application for its lead product candidate, Nuplazid (pimavanserin). 

If you purchased ACADIA common stock and/or call options between November 10, 2014 and March 11, 2015, inclusive, and would like to discuss your legal rights, call Richard Gonnello toll free at 877-247-4292 or at 212-983-9330 or send an e-mail to rgonnello@faruqilaw.com.

Tue, 20 Sep 2016 00:00:00Raul Mondragon
We are proud to announce the appointment of Timothy J. Peter to partner. Mr. Peter will head up the firm's Consumer Protection Litigation Department. http://www.faruqilaw.com/news/show/id/143 Timothy Peter joined Faruqi & Faruqi in 2015. Prior to joining Faruqi & Faruqi, Mr. Peter was an associate at Cohen Placittella & Roth, P.C. where he was involved in such high profile litigation as: In re Vioxx Products Liability Litigation ($8.25 million recovery for the Commonwealth of Pennsylvania) and In re Evergreen Ultra Short Opportunities Fund Securities Litigation ($25 million class action securities settlement in which participating class members will recover over 65% of their losses).

In addition, Mr. Peter played an important role in the resolution of In re Minerva Group LP v. Mod-Pac Corp., et al., in which defendants increased the price of an insider buyout from $8.20 to $9.25 per share, a significant victory for shareholders. Prior to attending law school, Mr. Peter worked for one of largest financial institutions in the world where he gained significant insight into the inner workings of the financial services industry.

Fri, 19 Aug 2016 00:00:00Alex Coviello