It’s at least the 2nd such lawsuit brought by a Covidien shareholder over the last month. At least 1 Medtronic shareholder has also sued to stop the deal from being consummated.
In July, COV stock owner Richard Taxman accused Covidien, its board of directors and chairman, president & CEO José Almeida of breaching their fiduciary duties in agreeing to the acquisition, which values COV shares at $93.22 apiece. Like Taxman’s suit, the complaint filed by Joseph Lipovich alleges that the deal undervalues Covidien.
But unlike Taxman’s suit, Lipovich also alleges that the deal violates Irish laws protecting shareholders, according to court documents. Both cases, filed with the U.S. District Court for Massachusetts, are seeking class-action status.
"Under the laws of Ireland, the directors of a publicly traded corporation must avoid conducting any affairs of a company in a manner which is oppressive to a shareholder, or which disregards the interests of a shareholder. In pursuing the unlawful plan to sell [Covidien] via an unfair process and at an unfair price, the individual defendants (as defined herein) violated this tenet of Irish corporate law," the Lipovich suit alleges. "Moreover, each of the defendants violated the federal securities laws by attempting to facilitate the proposed transaction without fully disclosing all material information. This action seeks to enjoin the individual defendants from oppressing the company’s shareholders in connection with the proposed transaction and from seeking shareholder approval of the proposed transaction without disclosing all material information in a proxy statement to Covidien shareholders."