Stockholders, ICN Both Claim Verdict a Victory
Attorneys for disgruntled shareholders who have been waging a decade-long legal battle against ICN Pharmaceuticals Inc. vowed to continue their legal assault on the Costa Mesa-based company Thursday despite a jury verdict that left them empty-handed.
The verdict returned late on Wednesday by jurors in the case that involves allegations of fraudulent behavior by ICN executives during 1986 and 1987 sparked an immediate war of words between attorneys representing ICN and dissident shareholders.
Jurors determined that about half a dozen statements made by ICN at a time when its stock was being offered for sale to the public appeared to be misleading. But the jury failed to agree on whether any of those statements were fraudulent, which is necessary to prove securities law violations and pave the way for monetary awards.
Jurors also failed to return a verdict on about half a dozen of the 13 allegations that shareholders had made. A mistrial was declared on those issues.
ICN on Thursday reiterated its claim that the jury’s decision represented a hard-fought triumph for the company.
“The verdict was a total disaster for the plaintiffs,” said ICN General Counsel Cliff Saffron. “They didn’t even scratch the surface when it comes to proving anything close to securities law violations.
But Daniel Berger, who represents shareholders in the $300-million lawsuit, countered with a decidedly different reading.
“Despite what [ICN Chairman Milan Panic] says in his news release, this is not a victory for the company,” Berger said. “Jurors found that seven of the 13 statements were false and contained lies.”
Berger acknowledged that jurors failed to reach agreement on whether the allegedly false statements were “material” matters that had an impact on shareholders’ decisions to buy ICN stock nearly a decade ago. And, Berger said, the partial verdict didn’t contain any monetary awards for disgruntled shareholders.
“In order for us to take this to the bank, we had to have the jury answer ‘yes’ to a second series of questions on whether these false statements were material,” Berger said. “And on that second question, the jury couldn’t reach a verdict.”
Berger maintained that plaintiffs would “retry the case again as soon as possible,” and that he expects to narrow the case’s focus to ICN statements that “jurors found to be false.”
The lawsuit revolves around allegations made by shareholders who bought ICN stock in mid-1986 and 1987, at a time when ICN was actively promoting one of its drugs as a possible treatment for AIDS. Shareholders allege that insiders pocketed millions of dollars from stock sales before acknowledging that the drug’s uses might be more limited than first anticipated. The company has steadfastly denied the allegations.
About the only thing opposing attorneys agreed on was that there is likely to be no appeal of the partial verdict that jurors returned after deliberating for nearly five days. Any new trial would be conducted in the courtroom of U.S. District Judge Kimba Wood, who presided over the first trial.
