Allergan, Inc. (NYSE:AGN) is exploring every possible legal alternative in its no holds barred battle with activist investor Bill Ackman and his Pershing Square hedge fund who are backing a takeover offer from Valeant Pharmaceuticals.

Allergan filed a request early Tuesday morning in federal court in California to block Pershing Square’s stake from voting in a December special meeting of the company’s shareholders. The lawsuit claims Ackman engaged in insider trading as he bought shares in Allergan based on non-public knowledge of Valeant’s plans to make an offer. A hearing on the lawsuit will be held at the end of this month.

Pershing Square has become Allergan’s largest shareholder, and insisted on the Dec. 18 meeting to try and replace six Allergan board members with new members who support Valeant’s takeover bid. Just over a week ago, Allergan’s current BoD characterized Valeant’s offer as “grossly inadequate.”

Quebec-based Valeant Pharmaceuticals Intl Inc (NSE:VRX) (TSE:VRX) covets Allergan to expand its portfolio and help it become a leading global drugmaker. Allergan and its CEO David Pyott, on the other hand, have continued to fight to keep the company independent, including a restructuring that eliminated more than 1,500 jobs.

Allergan

Details on Allergan insider info lawsuit

The lawsuit argues that Pershing Square’s acquisition of Allergan, Inc. (NYSE:AGN) shares should be coided voided as the purchases were based on insider information. Allergan claims that Pershing Square acquired $3.2 billion worth of its shares because it was informed by insiders that Valeant was planning a bid. Since Valeant announced its plans back in April, the value of Ackman’s Allergan investment has soared by more than a billion dollars.

Statements from Ackman on Allergan

In an interview with Bloomberg several months ago, Ackman, discussed his Allergan plans, saying that he used options to avoid U.S. Federal Trade Commission disclosure requirements.

Buying options instead of actual shares allows forms to not have to worry about government approval to purchase more than $75 million of a company ‘‘with an intent to influence control of the business,’’ Ackman explained in the interview.

Ackman also said his motivation in helping consummate the Allergan-Valeant deal was ‘‘helping facilitate a transaction between two companies for the benefit of the shareholders.’’