Lawsuit Claims Allergan Chiefs Inflated Stock : Investor: Shareholders file on company’s behalf, seeking return of salaries for misleading projections.
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In an unusual lawsuit filed in federal court in Los Angeles, three Allergan shareholders are seeking on behalf of the company to force 11 officers and directors to return their salaries for alleged acts to inflate the company’s stock price.
The derivative shareholders’ lawsuit was filed by Peter Stuyvesant Lt. and Joanne Gollomp. The shareholders--including a Pennsylvania corporation--are also seeking unspecified damages from Irvine-based Allergan’s former parent, Smith-Kline Beecham PLC.
Other than legal costs, the shareholders are not asking for any money for themselves.
The lawsuit--filed Wednesday--accuses the officers and directors of making inflated projections for its fiscal second quarter in 1989 and causing a 15% drop in the company’s stock price when results were far below those forecasted.
What’s more, the plaintiffs claim Allergan failed to disclose that its financial future depended on the timely introduction of a new retinal analyzer, and on a strong rate of new contact lens wearers.
The eye-care and skin-care company was hit by a flurry of shareholder lawsuits last year, claiming it gave an overly optimistic portrayal of its prospects before being spun off by Smith-Kline as a separate publicly traded company.
Those suits seek damages which would be paid out to individual shareholders.
Allergan said it had no comment on the suit filed Wednesday.
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