The payout model used by Bausch to settle related allegations in
The investors accused Bausch of trying to delay a trial, in part so the company can finish a spinoff that strips out its crown jewels and leaves many of its liabilities, including the potential $3 billion judgment, in a weaker entity that would be unable to pay its debts.
Should Bausch succeed, the investors “will be faced with a claim against a company that has divested some of its most valuable assets and is over-levered,” the group said in their letter to U.S. District Court Judge
The company disputed the claims about its spinoff and the potential liability.
“Bausch Health’s planned spinoff has no connection to the pending litigation,” the Bridgewater, New Jersey, company said in a statement. “Any suggestion that these cases have greater value than the class action is not true.” The plaintiffs have known about the spinoff for a year and are raising it now merely as a litigation tactic, Bausch said.
In a court filing Friday, Bausch Health called the $3 billion claim “wildly overstated and not reflective of any real-world potential exposure.”
Formerly known as Valeant Pharmaceuticals International Inc., Bausch Health previously
Some shareholders including USAA Mutual Funds Trust and Northwestern Mutual Life Insurance opted out of the class-action settlement and are pursuing their claims separately.
In May, it laid out projected financials for the two units and said Chief Executive Officer
Valeant became infamous on Wall Street for raising prices on drugs, a practice that drew scrutiny of its business practices. Under the leadership of former CEO
The case is In re Valeant Pharms. Int’l, Inc. Sec. Litig., Master No. 15-cv-7658-MAS-LHG Securities Direct Actions in U.S. District Court, District of New Jersey (Trenton)
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