A securities class action was recently brought forth on the behalf of investors in AbbVie Inc.
AbbVie, which is based in Worcester, Massachusetts, is a research-based biopharmaceutical firm. The company develops, manufactures and distributes pharmaceutical treatments for both adults and children.
Securities class action filed
On Nov. 26, 2014, Gardy & Notis, LLP announced it had filed a lawsuit to represent Murray Rubenstein, et al., as well as all organizations and individuals who bought or otherwise came to own the company's American Depository Shares, or bought call options, or alternatively sold put options, between June 20, 2014, and Oct. 14, 2014. These dates are inclusive, and represent the class period.
The securities class action was bought forth in the U.S. District Court for the Northern District of Illinois, and named Abbvie, as well as CEO Richard Gonzalez. According to the suit, the biopharmaceutical firm, as well as its chief executive, breached the Securities Exchange Act of 1934.
The lawsuit revolves around statements provided to Shire Securities either by the company, or on its behalf, relating to the biopharmaceutical firm's basis for pursuing a merger with Shire, and then its move to eliminate a merger agreement that had been created between the two.
In October, Gardy & Notis announced it was looking into statements made in connection with Abbvie's botched attempt to purchase Shire, according to Reuters. At the time, the law firm had asked investors to reach out in the event they had suffered losses after purchasing Shire ADRs between June 20, 2014, and Oct. 14, 2014.
In July, Gonzalez represented to investors that the proposed merger was not driven by expected tax benefits, the media outlet reported. Gardy & Notis, however, has taken a different point of view, asserting tax considerations were a critical variable considered in the agreement.
More specifically, the law firm alleged in its securities class action that during the class period, the company and Gonzalez made material misrepresentations and omissions, which were both fraudulent, about a proposed merger of Abbvie and Shire. Under the floated agreement, the two would combine and then reincorporate in Ireland.
When the U.S. Department of Treasury announced a different tax policy for inversions on Oct. 14, 2014, Abbvie indicated it was reconsidering the proposed merger. Company shares plunged after the company revealed this move, falling from $244.57 at the close of trading on Oct. 14, 2014, to $170.49 when the session ended on Oct. 15, 2014.
On Oct. 21, 2014, the biopharmaceutical firm declared that it had agreed to terminate the proposed merger, obligating it to pay a $1.64 billion fee to Shire.