Two Florida public service pension funds have asked a US court to certify as a class action their claims that drugs company Perrigo harmed investors by allegedly failing to disclose its liability on a €1.6bn tax assessment from Revenue.
Plaintiffs for the funds - the Boca Raton General Employees' Pension Plan and the Palm Bay Police and Firefighters' Pension Fund - said the dispute meets the requirements to certify it as a class action. This would combine several potential lawsuits with similar claims and damages into a single proceeding led by one firm.
The conflict stems from Revenue's audit of Elan's sale of a 50pc stake in Tysabri to Biogen. The deal happened eight months before Perrigo's acquisition of Elan in 2013.
Through the deal, Elan received $3.25bn (€2.9bn) and an ongoing royalty stream.
Revenue claims it should have been taxed as capital gains at 33pc instead of trading income at 12.5pc. Court documents said Revenue told the company of the charge in an October 2018 audit letter.
Perrigo appealed against the decision by Revenue last February. A hearing into the matter concluded last month, with the Irish courts still to announce their judgment.
The plaintiffs claim Perrigo failed to share the tax liability in the October 2018 letter from Revenue to its investors when filing a quarterly report in November 2018 to the US Securities and Exchange Commission (SEC).
The group of investors allege Perrigo didn't reveal the extent of its liability until an SEC filing in December 2018, causing Perrigo's share price to fall by 30pc in a day. They are looking for class action certification of all entities damaged by buying the stock between November 8, 2018, through December 20, 2018.
The motion was filed on July 10 to the US District Court for the Southern District of New York. Legal news website Law360 said Perrigo had looked to have the case dismissed, but a US Judge ruled in January that the plaintiffs could pursue their claim. Perrigo declined to comment.
Sunday Indo Business