The pharmaceutical group Grifols has filed a lawsuit in the United States for libel and market manipulation against the vulture fund Gotham City Research, its top executives Daniel Yu and Cyrus de Weck, and the hedge fund through which it operates, General Industrial Partners.
The Catalan group, which has lost 32% of its stock market value after the report from this fund that accused it of falsifying its accounts, asks the United States District Court of the Southern District of New York for the accused to pay it to compensate “the financial and reputational damage caused to the company and its interested parties”, especially its shareholders, who have lost more than 3,000 million euros in the stock market with the collapse.
Grifols also asks the court to apply “precautionary measures so that the defendants retract and do not persist in their actions,” in addition to financial compensation.
The complaint alleges that the fund and its directors “obtained a significant short position in Grifols, subsequently publishing and distributing a report containing falsehoods about Grifols' accounting, communications, finances and integrity,” which generated a significant profit for them. . Therefore, the company also asks that the defendants “be held fully responsible for the unlawful behavior alleged in the lawsuit.”
According to La Vanguardia, the pharmaceutical company has hired the American law firm Proskauer to direct its legal offensive. 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 the sale of Biomat shares to the CIG fund.
Proskauer has also won emblematic collective lawsuits in the pharmaceutical sector, such as an antitrust lawsuit filed against Golead Sciences, from which they claimed 3.6 billion dollars, or a lawsuit against Monsanto, now Bayer, by a group of people who accused their herbicides from causing the diseases they suffered.
The Grifols legal team, which runs the Osborne law firm
The fund itself seems to have realized the weakness of its position. Thus, on the 10th, one day after its publication, Gotham changed the wording of the report it initially released, and softened some aspects to try to safeguard itself against the legal actions that the company immediately announced.
Thus, according to the newspaper Expansión, in the new version Gotham no longer accuses the pharmaceutical company of hiding the loans it has granted to companies linked to the family, but only of "offering limited information" about this credit. In this way, Gotham recognizes that the response that Grifols gave to the CNMV is true, in which he detailed the notes of his annual accounts in which he had reported the loan that Gotham accused him of hiding.
Financial sources explained that the lawsuit is an obligatory milestone to try to regain the trust of investors 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.
