Court Allows ICN to Postpone Annual Meeting : Litigation: Appeals panel OKs requested delay until jurists decide appeal of order restraining stockbroker who is trying to oust Chairman Milan Panic.

Investors in ICN Pharmaceuticals Inc. have been wondering when the company will get around to holding its long-awaited annual meeting.

They will have to wait a little longer. A federal appeals court in New York has granted a request by company attorneys to postpone the meeting until the three-judge panel can decide on whether to overturn a recent lower court order barring a Beverly Hills stockbroker from soliciting disgruntled shareholders.

That could take another two months, the company said.

“We volunteered not to hold the annual meeting until this whole thing is resolved,” ICN attorney David Watt said Wednesday. The court granted the request on Tuesday. “We thought it was in the best interest of everybody.”

The court order to put off the meeting came as the federal court heard an appeal by attorneys for stockbroker Rafi Khan, who is trying to get out from under a lower court ruling that prevents him from making any further efforts to oust ICN Chairman Milan Panic and other board members.

Though Khan’s attorneys argued unsuccessfully that the appeals court should temporarily allow Khan to continue building an anti-Panic slate while his appeal is being considered, they viewed Tuesday’s hearing as a victory of sorts. The appeals court also promised to “expedite” the appeal process and ordered ICN to not take “any steps other than in normal course of business pending the disposition of the appeal.”

Khan attorney Michael Lesch interpreted that order to mean that ICN cannot take any action to discourage any future takeover attempts or stack the board.

“I am pleased that the court has granted an expedited appeal and that the company will be unable to gain an unfair advantage pending the outcome of the appeal,” Lesch said, adding, “I expect that the injunction will be overturned.”

Khan, who on the advice of his attorneys would not comment, was slapped with the preliminary injunction on May 13 by U.S. District Judge John Sprizzo. Khan, once a strong booster of ICN’s stock, has recently been involved in an attempt to wrest control of the Costa Mesa-based drug company, accusing Panic, who founded ICN in 1960, and other management officials of waste and collecting exorbitant salaries.

But his efforts to force installment of a new seven-member board were stymied when ICN sued him, alleging that he used inside information in his takeover foray. Sprizzo imposed the injunction against Khan while the ICN lawsuit is pending.

In his ruling, Sprizzo said that Khan violated his fiduciary responsibilities to ICN as an underwriter, lied in court testimony and used inside information while employed at Beverly Hills brokerage H.J. Meyers & Co.

Khan’s attorneys, however, alleged that the injunction unfairly left the company unfettered if it wants to consolidate its position further against increasing displeasure by large institutional shareholders.

From a 52-week high of $15.75 a share on Feb. 12, ICN stock has plummeted during the battle between Khan and the company. In Wednesday’s trading on the New York Stock Exchange, ICN’s stock closed at $9.625 a share, down 12.5 cents.

ICN has been quick to point out that it has the court’s backing in its accusations that Khan broke Securities and Exchange Commission laws in his takeover effort. In a press release Wednesday, ICN did not mention that it is further postponing its annual meeting, initially scheduled for May 12, or that it was ordered to stick to ordinary business practices.

The three-paragraph company statement said only that the court “kept in place” Sprizzo’s order and included a prepared comment by ICN attorney Arnold I. Burns.

“The action by the Court of Appeals is not surprising in light of Khan’s conduct,” Burns wrote. “Our legal system cannot countenance the undermining of a company by its underwriter who owes the company fiduciary duties and has fiduciary responsibilities.”

But in a telephone interview Wednesday, ICN’s Watt acknowledged that the appeals court ruling was more wide-ranging than the company had initially professed.

“The bottom line,” Watt said of Khan, “is that he is effectively stopped.”