First Manhattan Co has filed a lawsuit against VIVUS, Inc. (NASDAQ:VVUS) for extending the annual shareholder meeting to July 18.
Investment management firm First Manhattan Co alleged an egregious attempt by the drug maker VIVUS, Inc. (NASDAQ:VVUS) and the sitting board to disenfranchise Vivus’ shareholders.
However, the drug maker claimed the postponement from the originally scheduled July 15 was to provide its stockholders the additional time necessary to consider accurate information and make informed voting decisions that are not tainted by misleading statements made by First Manhattan Co.
First Manhattan Proposed Its Own Board Nominees
With 9.9 percent stake in the drug maker, First Manhattan seeks to take full control of Vivus’ board with its own nominees. The investment advisory firm castigated VIVUS, Inc.’s board for having limited knowledge of finance. It also charged the company of ‘hemorrhaging cash’ and with a ‘poor commercial launch for the best obesity drug ever developed’.
In a statement, the investment advisory firm said: “After a hard fought proxy fight, as of Sunday, July 14, 2013, FMC was poised to deliver sufficient votes at the annual meeting to replace the incumbent directors with its nominees”.
Moving The Goal Post
In its complaint filed with the Delaware Court, First Manhattan indicated the drug maker didn’t like what it saw on the scoreboard so it decided to move the goal post. In the lawsuit, First Manhattan claimed it had the votes to win the proxy fight and asked the court to stop VIVUS, Inc. (NASDAQ:VVUS) and its representatives from soliciting proxies or votes for the annual meeting.
The investment management firm also asked the inspector of elections to immediately certify results of the election of directors based on votes at the originally scheduled July 15 annual meeting.
According to Bill Berkrot and Jessica Toonkel of Bloomberg, if the request from First Manhattan is acceded to by the court, it would mean votes arriving after July 15 would not be counted.
The drug maker, however, alleged a paid advisor of First Manhattan made ‘false and misleading’ statements to retail shareholders through a telephone or ‘robo-call’ campaign. VIVUS, Inc. (NASDAQ:VVUS) also disclosed that a large number of votes from the retail investors were cast by proxy on July 12, after over a week of such calls.