Wednesday November 25th, 2020 7:41PM

Shareholders entitled to opioid distributor's board records

By The Associated Press

DOVER, Del. (AP) — A Delaware judge has ordered one of the world's largest distributors of opioid painkillers to turn over corporate records to shareholders investigating whether the company engaged in wrongdoing.

The judge ruled Monday that shareholders of AmerisourceBergen have demonstrated that they have proper purposes to conduct an inspection of company records and have established their right to inspect "formal board materials."

The plaintiffs also will be allowed to conduct a deposition to determine whether there are other materials that they should be entitled to see.

"The plaintiffs have shown by a preponderance of the evidence that there is a credible basis to infer that AmerisourceBergen possibly violated the Controlled Substances Act," Vice Chancellor J. Travis Laster wrote. "The evidence of possible wrongdoing is circumstantial, and it does not establish that wrongdoing occurred. What the evidence establishes is a credible basis to infer possible wrongdoing warranting further investigation."

The ruling comes after the company last year rejected a "books and records" demand from the plaintiffs seeking to investigate whether directors and officers had committed mismanagement or breached their fiduciary duties in connection with the distribution of opioids.

AmerisourceBergen, headquartered in Valley Forge, Pennsylvania, contended that the demand did not state a credible basis to suspect wrongdoing and that the scope of the inspection was overly broad.

In his ruling, the judge noted that AmerisourceBergen's role in America’s opioid epidemic has made it the target of several subpoenas, government investigations, and lawsuits. Since September 2017, the company has spent more than $1 billion on litigation and opioid-related costs, including settlements and legal fees relating to lawsuits and investigations, the judge said, citing the company's recent annual report.

In October, AmerisourceBergen and two other drug distributors, Cardinal Health and McKesson, agreed to pay $215 million as part of a $260 million settlement with two Ohio counties to avert the first federal trial over the opioid crisis.

Meanwhile, negotiations between the pharmaceutical industry and state attorneys general continue in an effort to settle more than 2,000 opioid-related lawsuits across the country. A proposed framework under consideration with drugmakers and distributors could be worth up to $48 billion in cash and treatment drugs nationally over time, according to published reports.

"The opioid crisis is a matter of national significance," Laster noted. “There is a credible basis to suspect that AmerisourceBergen’s situation did not result from an ordinary business decision that, in hindsight, simply turned out poorly.”

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Corporate News
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