Verdesian, Paine Schwartz Must Face Fraud Claims Over Merger

Verdesian Life Sciences LLC’s board and the private equity firm it’s linked to can’t dodge allegations they duped two of Verdesian’s part-owners into investing millions more, a Delaware judge ruled Wednesday, four months after he threw out parallel derivative claims.

The lawsuit targets nine current and former members of Verdesian’s board of managers, all of them appointed by Paine Schwartz Partners LLC, the investment firm—and 70% Verdesian owner—at which several of them are partners.

The case was filed in the Chancery Court by two equity holders, David W. Bergevin and MKE Holdings Ltd., that received their stakes when they sold ...