Elan directors hit with injunction
Published 07/09/2010 | 05:00
ELAN has been granted a High Court injunction to prevent two non-executive directors from claiming that a law firm they have engaged to undertake an inquiry into corporate governance issues at the company is doing so with a mandate from Elan.
Jack Schuler and Vaughn Bryson had hired a US lawyer to investigate unspecified corporate governance issues at Elan.
That was despite the Elan board having already hired another US firm, Atlanta-based McKenna, Long & Aldridge in conjunction with Irish firm William Fry, to undertake an independent review of such issues at the firm.
Elan accused the two men of acting "unilaterally" and "without any mandate or authority" from the board.
It alleged that the men's efforts would "have the effect of undermining" the independent review initiated by the company itself.
The pair had also threatened to start legal action in the US to demand access to all McKenna Long's investigative material and to be allowed to conduct their own review at Elan's expense.
McKenna Long's review is due before the Elan board on Wednesday next week.
Mr Schuler, a former president and chief operating officer of drug giant Abbot Laboratories, has been one of the most vocal critics of Elan's board in the past.
Mr Schuler owns investment company Crabtree Partners and over five million Elan shares.
He previously claimed that Elan chief executive Kelly Martin had engaged in a "gamut of poor executive decision-making" in the past and described Elan as the "poster child for lack of corporate governance".
He and Mr Vaughn were granted seats on the Elan board in June last year, and in return they agreed not to publicly disparage the firm.
In a statement, Elan branded Mr Bryson and Mr Schuler "dissident" shareholders and said the men have embarked on a series of actions which, in the company's view, "violate their fiduciary and contractual obligations to Elan".
Contacted at his Illinois home yesterday evening by the Irish Independent, Mr Schuler declined to comment.
However, it is believed Mr Schuler and Mr Bryson are unhappy that the Elan board has failed to respond to recent specific serious issues that have been raised in relation to the company.