Gardy & Notis, LLP has been appointed as lead counsel for investors who bought ShireAmerican Depositary Shares (ADS) between September 29, 2014 and October 14, 2014.AbbVie and Shire entered into a Combination Agreement on July 18, 2014 for a tax inversion where AbbVie would merge with and into Shire and reincorporate in Ireland to avoid paying U.S. corporate income taxes.
The case alleges that the merger was designed to take advantage of the tax loophole rather than some legitimate strategic rationale.AbbVie and CEO Richard Gonzalez, however, told investors that the expected tax benefit "was not the primary rationale" for the combination, and that "we would not be doing it if it was just for the tax impact."Even after the U.S. Treasury Department on September 22, 2014 announced a change to close the loophole of corporate of tax inversions, AbbVie and Gonzalez continued to falsely state that AbbVie's rationale for the merger was based on business and strategic reasons.
After repeatedly telling investors that tax benefits were "not the primary rationale" of the merger, AbbVie on October 14, 2014 announced that its board of directors was reconsidering the merger because of the negative impact of the Treasury Department's September 22, 2014 announcement.The price of Shire ADS, which had closed at $244.57 on the last trading day prior to the announcement, fell $74.08 per share (or 30.29%), to a close at $170.49 on October 15, 2014.
On March 10, 2017, Judge Robert M. Dow, Jr. of the United States District Court for the Northern District of Illinois issued a Memorandum Opinion and Order upholding allegations that AbbVie and Gonzalez violated the antifraud provisions of the federal securities laws during the period between September 29, 2014 and October 14, 2014.
The case is
Rubinstein v. Gonzalez, No. 14-cv-9465, in the United States District Court for the Northern District of Illinois.