Biovail Corporation - Securities Class Action

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Stanford Law School

Biovail Corporation Summary: The settlement was finalized on August 8, 2008 and the case was closed. The judge awarded Attorneys' Fees of 16.0145% or roughly $22.1 million. Expenses were reimbursed in the amount of 2,986,098.14.

According to a press release dated May 16, 2008, pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the Court, that the U.S. Action has been certified as a class action and that a Settlement for U.S.$138 million in cash has been proposed. A hearing will be held before the Honorable Gerald E. Lynch in the United States District Court, 500 Pearl Street, New York, New York 10007 at 11:00 a.m., on August 8, 2008 to determine (i) whether the proposed Settlement should be approved by the Court as fair, reasonable, and adequate; (ii) whether the proposed Plan of Allocation of the net proceeds of the Settlement should be approved by the Court as fair and reasonable; and (iii) to consider the application of Plaintiffs’ Co-Lead Counsel for attorneys’ fees and reimbursement of expenses.

In a press release dated December 11, 2007, Biovail Corporation (NYSE:BVF)(TSX:BVF) announced that the Company and the named individual Defendants have entered into an agreement in principle to settle the class-action shareholder litigation in the case In Re Biovail Corporation Securities Litigation, Case No. 03-CV-8917 (RO). Once completed, the proposed settlement will be subject to approval by the United States District Court for the Southern District of New York. The proposed settlement class includes, with certain exceptions, all persons or entities that purchased the common stock of Biovail Corporation during the period from February 7, 2003 to March 2, 2004. Under the terms of the proposed agreement, the total settlement amount payable is $138 million. Biovail estimates that it will ultimately pay approximately $85 million after resolution of all insurance claims.

As summarized by the Company’s FORM 20-F/A for the fiscal year ended December 31, 2006, in late 2003 and early 2004, a number of securities class action complaints were filed in the United States District Court for the Southern District of New York naming Biovail and certain officers and directors as defendants. On or about June 18, 2004, the plaintiffs filed a Consolidated Amended Complaint (the "Complaint"), alleging among other matters, that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Company responded to the Complaint by filing a motion to dismiss, which the Court denied. Thereafter, the Company filed its Answer denying the allegations in the Complaint. On August 25, 2006, the plaintiffs filed a Consolidated Second Amended Class Action Complaint ("Second Amended Complaint") under seal. The Second Amended Complaint alleges, among other matters, that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. More specifically, the Second Amended Complaint alleges that the defendants made materially false and misleading statements that inflated the price of the Company's stock between February 7, 2003 and March 2, 2004. The plaintiffs seek to represent a class consisting of all persons, other than the defendants and their affiliates, who purchased the Company's stock during that period. On October 16, 2006, the Company filed its Answer denying the allegations in the Second Amended Complaint. On February 28, 2006, the plaintiffs filed a motion for class certification. The Company has opposed that motion. That motion is expected to be heard in the near future. Discovery in this case is ongoing, and the action is now proceeding on its merits through normal legal process.

The original complaint charges Biovail and certain of its officers and directors with violations of the Securities Exchange Act of 1934. According to the complaint, Biovail consistently reported "record" growth throughout the Class Period, and defendants issued positive earnings and income growth forecasts of 30% throughout this period. Unbeknownst to investors, however, Biovail allegedly used hundreds of millions of dollars in proceeds from previously issued stock to make acquisitions and thereby create the illusion of increasing revenue and demand for Biovail products. This scheme also allowed certain defendants to obtain more than $40 million in performance-based stock grants and options. The complaint also alleges that defendants failed to disclose that during the Class Period defendants could not maintain the Company's historical profit margins and revenue growth at or above 30% amidst growing competition; that earnings forecasts were not based on reasonable assumptions, especially given the fact that defendants knew that the Company was experiencing an overall slow-down in internal growth and that the Company could not control the production and sales costs of Biovail's expensive products; and that such growth could not possibly keep pace with the Company's historical performance, much less exceed it. According to the complaint, defendants knew throughout the Class Period that its earnings forecasts for Biovail could not be met as evidenced by the fact that the Company was considering emergency plans for bolstering its business through essential acquisitions which were designed to replace foreseeable declining revenues.

The complaint further alleges that on October 30, 2003, Biovail shocked the market by announcing revised guidance for 2004 and its financial results for the third quarter of 2003, which were substantially below prior guidance -- (net income down 83% for the quarter and with revenue growth of 10% versus prior guidance of more than 30%). Defendants issued a series of releases which revealed rising expenses which far outpaced any prior guidance or plan and lower revenues which far underperformed plan. Immediately following this disclosure, Biovail's shares plummeted, 20% or $5.38 per share, from the prior day's high, in the single day's trading session to a new 52 week trading low.

INDUSTRY CLASSIFICATION:
SIC Code: 2834
Sector: Healthcare
Industry: Biotechnology & Drugs

COMPANY/ISSUER NAME:	Biovail Corporation
COMPANY/ISSUER TICKER:	BVF
COMPANY WEBSITE:	http://www.biovail.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Vera A. Hayes, et al. v. Biovail Corporation, et al.

COURT: S.D. New York	DOCKET NUMBER: 03-CV-8917
JUDGE NAME: Hon. Richard Owen
DATE FILED: 11/12/2003	SOURCE: Business Wires
CLASS PERIOD START: 5/17/2002	CLASS PERIOD END: 10/30/2003
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Alfred G. Yates, Jr. 429 Forbes Avenue, Pittsburgh , PA, 15219 (voice) 412.391.5164, (fax) , Cauley Geller Bowman Coates & Rudman LLP (Little Rock, AR) P.O. Box 25438, Little Rock, AR, 72221-5438 (voice) 501.312.8500, (fax) 501.312.8505, Cauley Geller Bowman Coates & Rudman, LLP (New York) 200 Broadhollow, Suite 406, Melville, NY, 11747 (voice) 631.367.7100, (fax) 631.367.1173, Goodkind Labaton Rudoff & Sucharow LLP 100 Park Avenue, New York, NY, 10017 (voice) 212.907.0700, (fax) 212.818.0477, info@glrslaw.com Law Offices of Charles J. Piven, P.A. World Trade Center-Baltimore,401 East Pratt Suite 2525, Baltimore, MD, 21202 (voice) 410.332.0030, (fax) , pivenlaw@erols.com Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY) One Pennsylvania Plaza, New York, NY, 10119-1065 (voice) 212.594.5300, (fax) , Schatz & Nobel, P.C. 330 Main Street, Hartford, CT, 06106 (voice) 800.797.5499, (fax) 860.493.6290, sn06106@AOL.com Schiffrin & Barroway LLP 3 Bala Plaza E, Bala Cynwyd, PA, 19004 (voice) 610.667.7706, (fax) 610.667.7056, info@sbclasslaw.com Scott & Scott LLC P.O. Box 192, 108 Norwich Avenue, Colchester, CT, 06415 (voice) 860.537.5537, (fax) 860.537.4432, scottlaw@scott-scott.com Wechsler Harwood, LLP. 488 Madison Avenue 8th Floor, New York, NY, 10022 (voice) 212.935.7400, (fax) 212.753.3630, info@whesq.com Weiss & Yourman (New York, NY) The French Building, 551 Fifth Ave., Suite 1600, New York, NY, 10126 (voice) 212.682.3025, (fax) 212.682.3010, info@wyca.com Wolf Haldenstein Adler Freeman & Herz LLP (New York) 270 Madison Avenue, New York, NY, 10016 (voice) 212.545.4600, (fax) 212.686.0114, newyork@whafh.com Wolf Popper, LLP 845 Third Avenue, New York, NY, 10022-6689Ave (voice) 877.370.7703, (fax) 212.486.2093, IRRep@wolfpopper.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 13

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint For Violation Of The Securities Exchange Act Of 1934
Type: Complaint		Date on the document: 11/12/2003

REFERENCE COMPLAINT

In Re: Biovail Corporation Securities Litigation

COURT: S.D. New York	DOCKET NUMBER: 03-CV-8917
JUDGE NAME: Hon. Richard Owen
DATE FILED: 8/25/2006	SOURCE: Business Wires
CLASS PERIOD START: 2/7/2003	CLASS PERIOD END: 3/2/2004
TYPE OF COMPLAINT: Second Amended and Consolidated
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Bernstein Litowitz Berger & Grossmann LLP (New York, NY) 1285 Avenue of the Americas, 33rd Floor, New York, NY, 10019 (voice) 212.554.1400, (fax) 212.554.1444, blbg@blbglaw.com Milberg LLP (New York) One Pennsylvania Plaza, 49th Floor, New York, NY, 10119 (voice) 1.877.692.1965, (fax) , ContactUs@milberg.com Milberg Weiss & Bershad LLP (New York) One Pennsylvania Plaza, 49th Floor, New York, NY, 10119 (voice) 212.594.5300, (fax) 212.868.1229, info@milbergweiss.com Milberg Weiss Bershad & Schulman LLP (New York) One Pennsylvania Plaza, 49th Floor, New York, NY, 10119 (voice) 212.594.5300, (fax) 212.868.1229, info@milbergweiss.com Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY) One Pennsylvania Plaza, New York, NY, 10119-1065 (voice) 212.594.5300, (fax) , Milberg Weiss LLP (New York) One Pennsylvania Plaza, 49th Floor, New York, NY, 10119 (voice) 212.594.5300, (fax) 212.868.1229, info@milbergweiss.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 6

DOCUMENTS FOR THE REFERENCE COMPLAINT
Consolidated Amended Class Action Complaint
Type: Complaint		Date on the document: 06/18/2004
Notice of Filing Consolidated Second Amended Class Action Complaint
Type: Notice		Date on the document: 08/25/2006
Stipulation and Agreement of Settlement
Type: Settlement		Date on the document: 4/4/2008
Preliminary Order For Notice And Hearing In Connection With Settlement Proceedings
Type: Order		Date on the document: 4/9/2008
Notice Of Pendency Of Class Action And Proposed Settlement, Motion For Attorneys' Fees And Settlement Fairness Hearing
Type: Notice		Date on the document: 5/9/2008
Proof of Claim and Release
Type: Other		Date on the document: 5/9/2008
Mandate From The United States Court Of Appeals
Type: Order		Date on the document: 7/17/2008
Order And Final Judgment
Type: Docket		Date on the document: 8/8/2008
Order Awarding Fees And Expenses
Type: Order		Date on the document: 8/8/2008
U.S. District Court Civil Docket
Type: Docket		Date on the document: 8/8/2008

OTHER DOCUMENTS
Class Action Complaint For Violation Of Federal Securities Laws
Case Name and/or Number: Chrapko
Type: Complaint		Date on the document: 11/13/2003
Class Action Complaint For Violation Of Federal Securities Laws
Case Name and/or Number: Felgoise
Type: Complaint		Date on the document: 11/14/2003
Class Action Complaint for Violation of Federal Securities Laws - Jury Trial Demanded
Case Name and/or Number: Emery, et al. v. Biovail Corporation, et al.
Type: Complaint		Date on the document: 12/18/2003

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