- A federal judge heard testimony from Allergan alleging that Valeant has committed insider trading. The allegation is based on the fact that Pershing, a large Valeant shareholder, acquired a large percentage of Allergan stock before Valeant disclosed plans to make a bid for Allergan.
- Though U.S. District Judge David Carter conceded that these allegations raise "serious questions," the judge refused to issue an injunction against Valeant, which would prevent the company from voting its shares—9.7% of Allergan's outstanding stock—at the upcoming shareholder's meeting in December.
- Both companies have been ordered to file additional disclosures; but next month, Allergan shareholders will have an opportunity to vote in favor of a merger with Valeant.
The epic struggle between Valeant and Allergan is playing out across a wide-ranging battlefield that includes the media, shareholder meetings, and courtrooms. The latest court case highlights how nuanced and complex the laws surrounding shareholders' rights are.
Michael Pearson, CEO of Valeant, is pleased with the outcome. However, even if shareholders vote for a merger between Allergan and Valeant, Allergan still has the right to delay the merger by challenging the court ruling.