Pershing Square Capital Management, the activist investment firm run by Bill Ackman, has requested that the lawsuit filed against it by Allergan be thrown out. Court documents reviewed by ValueWalk claim the Botox maker does not have the standing to sue Pershing Square.
Motion filed Friday
The case in question deals with insider trading, and the firm’s lawyers filed the motion for dismissals late on Friday. Valeant Pharmaceuticals is also named as a defendant in the lawsuit. Ackman had teamed up with Valeant in a push for a deal to have Allergan acquired by Valeant.
The court documents highlight the timing of trades made by Pershing Square’s PS Fund 1, trades made by the plaintiffs in the case and the recently announced acquisition of Allergan by Actavis. They also provide a long list of precedent-setting cases that bear some resemblances to the lawsuit filed against Pershing Square and Valeant.
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Some of Allergan’s claims called “moot”
Attorneys note that some of the issues raised by Allergan in the lawsuit are now moot points because they’ve already been handled. The claims relating to disclosures made by Pershing Square and Valeant have since been corrected.
Also not long after Allergan announced the deal to be acquired by Actavis, Pershing Square withdrew its proxy solicitation and Allergan canceled the Dec. 18 special meeting. As a result, they argue that these controversies are no longer an issue.
Allergan can’t sue
The motion also alleges that neither Allergan or Ms. Parschauer have the standing to sue Pershing Square or Valeant under Allergan’s Rule 14e-3. The rule states that “only contemporaneous traders who could have purchased from, or sold to, the alleged inside trading can bring suit under the rule. A court ruling from Nov. 4 states that Allergan wasn’t a contemporaneous trader, so it can’t sue due to that rule.
As for Ms. Parschauer, the motion also states that she can’t be a contemporaneous trader on any transactions other than her Feb. 26 sale. Her only other sale was on March 11, and the motion states that it was “far too late to be contemporaneous.” Additionally, it states that it’s “impossible” for her to have been Pershing Square’s counterparty in that transaction.
See full PDF below.