The pharmaceutical group Grifols has hired the American law firm Proskauer to take legal action against Gotham City Research, the vulture fund that has accused it of falsifying its accounts and that caused a 40% collapse of its stock market shares last week.
Financial sources explained that the lawsuit is an obligatory milestone to try to regain the trust of investors in the face of Gotham's accusations and to stop the claims that have been announced, both in Spain and in the United States, by law firms specialized in class actions against directors in cases of business malpractice. The same sources indicate that the lawsuit is expected to be presented next week, and in any case before the end of the month.
Grifols has finally chosen to file its lawsuit in the United States due to the speed and forcefulness of its judicial system. According to Jaume Puig, general director of GVC Gaesco, in the United States, if the complaints are confirmed false, Daniel Yu and Cyrus De Weck, those responsible for Gotham City Research, the company that makes the reports, and the hedge fund General Industrial Partners , who is the one who takes positions in the stock market, could be convicted of market manipulation, a serious crime, punishable by prison.
Gotham has already been accused of libel on other occasions. In 2014, following its accusations against the British company Quindell, the firm was even condemned because it did not even appear in the lawsuit filed against them in the High Court of Justice of England and Wales. It so happens that Gotham's accusations, in this case, turned out to be true and Quindell went bankrupt.
In the United States, however, the sentences are multimillion-dollar. One of the group's advisors, Tomás Dagà, founding partner of the Osborne law firm
Proskauer is the law firm that has advised Grifols on a large part of its transactions in the United States, such as the purchase of Talecris, Biotest, the Chinese company Shanghai RAAS or, more recently, the agreement with GIC, the Singapore sovereign fund. to acquire shares without voting rights in Biomat for 1,000 million dollars.
Grifols' lawsuit will be based on the fact that all the transactions that Gotham considers irregular "have been recorded in the company's books and in its public accounts, both presented to the Spanish regulator and in the 20-F form presented to the SEC in the United States. , so there is no new information that can be considered hidden”, and these have been endorsed by the auditors (KPMG) and the regulators, as already explained in the relevant facts sent to the CNMV. In the operations with Scranton, an investment company owned by the Grifols family, and others questioned in the report, the firm assures that it has “supporting documentation” that supports them, including “valuations and opinions of third parties.”
For this reason, he considers, the accusations that Gotham launches, of “manipulating the reported debt and operating profit” and of presenting “misleading and incorrect” accounting, are due only to the fund's interest in “lowering the share price as expected.” they themselves reflect on page 2 of their report, to obtain benefits.”
Financial sources recognize that the fact that Gotham closed its position on the same day it published the report, to pocket a profit that could have exceeded 20 million euros, gives strength to the accusation that it was prepared only for the purpose of manipulation. the market.
Grifols' lawsuit will also be key to stopping the lawsuits prepared by various law firms in the United States, specialized in collective lawsuits or "class actions." Since the same day Gotham published the report, offices like Holzer
In Spain, Aemec, a shareholder association that acted as a prosecutor in the Bankia IPO case, also announced its intention to study the legal consequences of the hedge fund report. This entity conveys shareholders through the Zunzunegui and Cremades offices.
In this sense, Grifols has hired the services of the Baker law firm in Spain
Baker's hiring
