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  • lawsuitreporter lawsuitreporter Jul 5, 2011 11:16 AM Flag

    Forest Laboratories, Inc. Investor files Lawsuit over Information on CEO’s battle with Government


    A large investor has filed a lawsuit in State Court against Forest Laboratories in effort to get access to information about the proposal by… to bar the company and its CEO from doing business with Federal Health programs, such as Medicare.

    If you are a current long term investor in shares of Forest Laboratories, Inc. (NYSE: FRX), and/or if you

    have any information relating the investigation, you have certain options and you should contact the Shareholders Foundation at or call +1(858) 779 - 1554.

    According to the complaint the plaintiff seeks information on the proposal by the Office of Inspector General of Health and Human Services indicating the intent to consider excluding Forest Laboratories CEO Mr. Solomon from participating in federal healthcare programs. The plaintiff claims that shareholders have a right to know what Mr. Solomon did or failed to do to warrant such an “unprecedented” action by the U.S. government.

    Forest Laboratories disclosed among other things in its latest annual report with the U.S. Securities and Exchange Commision (“SEC”) that the potential action by the Office of Inspector General of Health and Human Services originates from matters that Forest Laboratories settled in 2010 for $313million. Forest Laboratories also said that its CEO had until June 13, 2011 to respond to the notice by the Office of Inspector General of Health and Human Services and if it after the response determines that the CEO should be excluded, Mr. Solomon would be required to step down from his present executive positions unless the effectiveness of such exclusion is enjoined by legal proceedings.

    However, the plaintiff alleges that “the stockholders have not even been informed of the factual charges against Mr. Solomon” and that “the company’s public disclosures about this affair have been opaque, inaccurate and seemingly designed to reveal the least possible information”. The plaintiff fears that “if Forest Laboratories is prohibited from participating in federal health-care programs due to Mr. Solomon’s presence at the company, the company’s revenues will be dramatically reduced”.

    Forest Laboratories reportedly said it believes the claims are “entirely without merit”.

    Forest Laboratories’ Total Revenue rose within the past four 12months filing periods from $3.83billion to lately $4.41billion. Its Net Income over the same time frame fell from $967.93million to $682.38million and then rose to $1,046.77million lately.

    Even though shares increased from as low as $19.12 in March 09 to lately $39.62 per share, before that shares of Forest Laboratories, Inc. (Public, NYSE: FRX) fell from as high as $57.08 during 2007.

    Those who are current long term investors in shares of Forest Laboratories, Inc. (Public, NYSE:FRX), and/or those who have any information relating the investigation, have certain options and should contact the Shareholders Foundation.