The suit, filed earlier this week in the US Federal Court in Manhatten, alleges that Sun failed to disclose material information about manufacturing problems at its US subsidiary Caraco in its contested 2007 tender offer.
The main allegation, detailed in an SEC filing, is that the US FDA’s seizure of $20m worth of Caraco drugs in June “grew out of a long pattern of failure to comply with regulatory requirements,” which Taro believes should have been disclosed.
Taro also said Sun failed to transmit information about lawsuits filed against it by Caraco sharholders, and “misappropriated confidential information about Taro gathered as part of the proposed merger transaction.”
Taro is seeking “to enjoin use of Sun’s improper tender offer materials as well as damages and injunctive relief.”
The full list of allegations can be seen here.
A Sun spokesman told in-PharmaTechnologist that: “Taro's accusations regarding Caraco, in addition to being completely irrelevant, are false. Sun continues to manufacture products at eight other facilities in the US & India, all of which are USFDA approved.
He added that: “Taro's previous attempt to thwart Sun's contractual rights has already resulted in a stunning denunciation of the Taro directors by the Tel Aviv District Court, and Sun has no doubt that the current proceeding will lead to a similar result.
“Taro's legal action seeks only to distract the company's shareholders from the following simple facts: As Taro has already acknowledged, Sun's investment in Taro saved the company from near-certain bankruptcy.
“The Levitt family, which agreed to sell its shares in Taro to Sun, has confirmed that it will seek any means available to it to avoid complying with this agreement. Taro's board has abrogated any sense of responsibility to protect the company's shareholders, and has instead allowed the company to be manipulated into a series of futile legal actions, all designed to benefit only the Levitt family.
“Sun will fight this action vigorously, and will take all legal steps available to it to ensure that the Taro resources being expended on this baseless litigation be restored to the company.