According to a press release dated July 30, 2007, silencing the objections of a shareholder who decried the bill, an appeals court has approved a $36.6 million fee sought by attorneys at Labaton Sucharow & Rudoff for its work in negotiating a settlement with drug maker Bristol-Myers Squibb. The U.S. Court of Appeals for the Third Circuit last Friday upheld the ruling of the New Jersey district court, which approved the firm's fee application after concluding that Labaton Sacharow had “earned every penny that they've sought” in resolving the securities class action. Shareholder Rita Carfagna had appealed after U.S. District Court Judge Stanley Chesler shrugged off her criticism and said the firm was skilled and efficient, and its bill on the “low end” of legal fee applications in similar cases. The spat stems from a $185 million settlement of a number of class actions consolidated in July 2000 in which shareholders claimed that Bristol-Myers and its top executives misled them about the safety and predicted sales of a new pill.
According to the docket posted, on May 11, 2006, the Settlement Fairness Hearing was held before U.S. District Judge Stanley R. Chesler. That day, the Court entered the Order granting the motion for attorney fees as well as the Judgment granting the motion for settlement.
In a press release dated February 9, 2006, Bristol-Myers Squibb Company announced today that U.S. District Judge Stanley Chesler has entered preliminary approval of a settlement agreement with plaintiffs in the consolidated securities class action litigation, pending in the U.S. District Court for the District of New Jersey, relating to the Bristol-Myers Squibb investigational compound, omapatrilat (VANLEV(TM)). The settlement was entered into without any admission of wrongdoing by the Company. Notice to potentially eligible claimants will be mailed out in early March 2006. The settlement is subject to certain conditions, including the District Court's review and final approval at a fairness hearing, which is scheduled for May 11, 2006.
In a press release dated January 23, 2006, Bristol-Myers Squibb Company has recorded a reserve in the amount of $185 million in anticipation of the potential settlement of its consolidated securities class action litigation, pending in the U.S. District Court for the District of New Jersey, relating to the company's investigational compound, omapatrilat (VANLEV(TM)). Beginning in the spring of 2000, the plaintiffs brought lawsuits against the company and certain company executives alleging violations of federal securities laws and regulations. The parties have reached an agreement in principle on financial terms and are seeking to finalize non-financial aspects of a potential settlement. At this time, there can be no assurance that a final settlement agreement will be reached. Further, any settlement would be subject to a number of conditions, including preliminary court approval, completion of a fairness hearing and final court approval following completion of the fairness hearing. There can be no assurance that those conditions will be satisfied.
In a press release dated August 19, 2005, a federal judge in Trenton has denied a bid by Bristol-Myers Squibb to dismiss a shareholder lawsuit, clearing the way for a jury trial as soon as this winter. U.S. District Judge Stanley Chesler issued a series of rulings late Tuesday that significantly narrow the scope of the shareholders' case, which alleges Bristol officials hyped Vanlev, even though they knew the Food and Drug Administration would reject it - all in an effort to boost the company's stock price.
In a 109-page ruling, Chesler removed Bristol's chief executive, as a defendant in the case, and limited the liability of former Chairman and Chief Executive. The judge also excluded six of 11 public statements by Bristol about Vanlev the lawsuit claimed were misleading. The judge also dismissed all claims related to the period from March 2001 to March 2002, when Bristol was conducting a massive clinical trial on Vanlev. Most significantly, Chesler dismissed allegations Bristol executives personally profited from the inflated stock price. Most shareholder lawsuits allege "pump and dump" deals in which executives profit from cashing stock options. In this case, Chesler ruled, "the plaintiff will have to rely on conscious misbehavior or recklessness" to establish motive.
In 2002, a class action was filed against Bristol Myers Squibb Company in the US District Court for the Southern Distict of New York. According to the docket 02-CV-2251 for the 2002 action, on October 7, 2002, the Court issued a Stipulation and Order granting the motion to transfer claims and the complaints containing only Vanlev claims to the USDC for the District of New Jersey. All non-Vanlev cases and all non-Vanlev claims pending in the USDC for Southern District of New York were ordered to remain in that Court.
The original lawsuit alleges that during the Class Period, defendants issued false and misleading statements relating to the development of the drug, VANLEV, and promoted VANLEV as the most effective drug for treating hypertension. To allay any safety concerns, defendants conditioned the market to believe that use of VANLEV posed no serious side effects. However, as the complaint alleges, defendants knew but failed to disclose that the results of the Bristol-Myers- conducted clinical trials of VANLEV showed that a rare and life-threatening side effect, angioedema, had afflicted some patients participating in the trials. Defendants' false and misleading statements concerning VANLEV artificially inflated Bristol-Myers' stock price during the Class Period.