CHARLESTON – A group of shareholders of Mylan NV have filed a class action lawsuit against the company, alleging that it misused a Dutch foundation to fend off a takeover by Teva.

Heather Bresch and Robert J. Coury were also named as defendants in the suit.

City of Riviera Beach General Employees System and Doris Arnold claim in November Mylan entered into an agreement to a merger with Abbott Labs to combine "Old Mylan" with certain non-U.S. businesses of Abbott labs and create "New Mylan," which was organized under the laws of the Netherlands, according to an amended complaint filed July 10 in the U.S. District Court for the Western District of Pennsylvania.

The plaintiffs claim although the merger was structured as a tax inversion to allow Mylan to lessen its obligations under the U.S. tax code, Old Mylan and its executive chairman and CEO repeatedly assured shareholders that shares of New Mylan would be traded on the NASDAQ Global Select Market and the surviving corporation would abide and be bound by NASDAQ listing rules.

The representations made by Old Mylan and the individual defendants that New Mylan would abide by the NASDAQ listing rules, however, was a sham, according to the suit.

The plaintiffs claim Mylan lowered the value of their shares.

The company also breached its fiduciary duty to shareholders of Old Mylan by not notifying them of its defense plans before they voted to approve the merger with Abbott that led to the formation of Mylan NV, according to the suit.

The plaintiffs claim as a consequence of the breach of duty, Old Mylan shareholders were deprived of their change to cast a fully-informed vote on the merger.

"By failing to disclose the full truth about the call option, the individual defendants deprived the Old Mylan shareholders of the right to cast an informed vote on whether they wanted to hold securities in a company that had a Dutch poison pill in place and that, accordingly, likely would trade at a discount to where it would have traded had it not had such an anti-takeover device in place," the complaint states.

The defendants also breached their contract with the plaintiffs and caused them damages, according to the suit.

The plaintiffs are seeking the court to rescind the shareholder vote approving the Abbott merger and to award compensatory damages. They are being represented by Benjamin J. Sweet Carlson Lynch Sweet & Kilpela LLP; Mark C. Gardy, James S. Notis and Meagan A. Farmer of Gardy & Notis LLP; and Michael J. Barry and Jay W. Eisenhofer of Grant & Eisenhofer PA.

U.S. District Court for the Western District of Pennsylvania case number: 2:15-cv-00821

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