Biovail, Former CEO Melnyk Settle Proxy Fight
Tue, 05/26/2009 - 6:37am
NEW YORK (AP) — Biovail Corp. and its former Chief Executive have settled their ongoing proxy fight ahead of the biotechnology company's annual meeting. Founder and former CEO Eugene Melnyk, along with EM Holdings which he controls, had been urging shareholders to vote for two board nominees. The company urged shareholders not to vote for those nominees. Under the settlement, Melnyk agreed to vote his and EM Holdings' roughly 16.4 million shares — representing roughly a 10 percent stake — in favor of the company's nominees, while withdrawing one of his own nominees. Biovail, meanwhile, will appoint one of Melnyk's nominees, Frank Potter, to the board immediately following the meeting. Melnyk has also agreed to refrain from participating in any proxy contest or shareholder proposal until the completion of Biovail's shareholders' meeting in 2010. Biovail and Melnyk have been in a years' long dispute over the direction of the company that started with his retirement in 2007. Melnyk, the owner of the Ottawa Senators National Hockey League team, retired after he and Biovail were accused of accounting fraud. He remains a major shareholder and wants the company to continue focusing on generic drugs while current management wants to concentrate on treatments for central nervous system disorders. In 2008, he attempted to change the company's leadership by proposing his own 10 candidates for the board of directors. Earlier in 2009, the company settled investigations with U.S. and Canadian authorities alleging that it defrauded and deceived investors from 2001 to March 2004. The company's annual meeting is scheduled for Thursday in Toronto.