Pasithea, Directors Sued Over Move to Curb Stockholder Power (1)

Shareholders accused biotech company Pasithea Therapeutics Corp., and its directors of attempting to limit stockholder voting power by acquiring interests in other companies for self-interested reasons, according to a lawsuit filed Monday in the Delaware Chancery court.

Investors that brought the lawsuit, including Leonite Capital LLC and Camac Fund LP, sought to shake up the California biotech company’s board this summer. But the directors allegedly took improper defensive action to protect their board seats and executive salaries, in violation of their fiduciary duties, said the plaintiffs.

Pasithea, which focuses on brain disorders, lost over 80% of its market value in ...