More than 50 funds that own Bausch Health Companies Inc BHC investors are reportedly seeking to block the eye-care business spin-off, Bausch + Lomb Corp BLCO.
Bausch + Lomb priced its initial public offering at $18/share, falling short of expectations.
The investors say improper asset shifting protects the company from securities lawsuits seeking to hold them liable for misrepresentations about its financial health.
“The spin-off likely will render Bausch Health unable to pay any securities-fraud judgment that plaintiffs obtain because Bausch Health is essentially giving away its assets,” Bloomberg reported citing some investors. They seek as much as $3 billion in damages in the securities-fraud suits.
According to court dockets, Superior Court Judge Margaret Goodzeit in Somerset County, New Jersey, is scheduled to hear arguments Tuesday.
Bausch has run into some headwinds over the last few years, facing litigation over its business practices. The company rebranded from Valeant Pharmaceuticals in 2018.
Valeant came under scrutiny for raising the prices of some of its drugs by as much as 500%.
The company also was accused of misleading investors about revenue growth as part of a scheme involving Philidor Rx Services, a mail-order pharmacy Valeant established.
In 2019, Bausch agreed to pay more than $1.2 billion to settle some investors’ federal-court claims that alleged Valeant executives artificially inflated the company’s stock price by misleading shareholders.
Price Action: BHC shares closed at $7.66 on Monday.
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