Biovail’s long-running battle against several hedge funds and analysts it accused of driving down its stock price has provided lots of drama. Two years ago, Manhattan federal district court Judge Richard Owen sanctioned Biovail for using documents, which were under a protective order, to file a separate RICO suit against the hedge funds and analysts.

(Andrew Longstreth wrote a great American Lawyer feature about the embarrassing hearings before Owen in 2007, in which Biovail’s lawyers at Kasowitz, Benson, Torres & Friedman and Howrey blamed each other for the screw-up.) Then, in February, a couple of plaintiffs lawyers were sanctioned by Newark federal district court Judge Stanley Chesler, who said they’d copied Biovail’s RICO suit in filing a shareholders class against the same hedge funds and analysts. (In a harshly worded ruling (pdf), Chesler also dismissed the suit.)

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Tags: biovail, district court judge, friedman, hedge fund, hedge funds, richard owen, shareholders, stanley chesler

West Palm Beach (HedgeCo.net) – Federal Judge Stanley R. Chesler of the Federal District Court of New Jersey, Friday threw out a Canadian pharmaceutical company shareholder lawsuit against a group of hedge funds including SAC Capital Advisors LP.

The Judge dismissed the lawsuit, saying "The conduct is so egregious, and the futility of imposing alternate sanctions is so clear, that dismissal is the only appropriate sanction."

Apparently the shareholders had violated a New York judge’s order sealing documents in a related Biovail case.

"The record before the court suggests that these proceedings and the RICO action proceedings were all part of a choreographed strategy by Biovail and its attorneys designed to constitute a counterattack against the Biovail securities action," the Judge wrote.

"We are gratified that the court has seen through this charade and has dismissed the case," A spokesman for SAC said.

Alex Akesson

Editor for HedgeCo.Net
Email: alex@hedgeco.net

Tags: accredited-investors, biovail, charade, counterattack, federal judge, federal-district-court, futility, hedgeco, palm-beach, pharmaceutical company, sac-capital-advisors, sanction, sanctions, shareholder-lawsuit, stanley r chesler, york judge