The Briscoe Law Firm, PLLC, founded by a former state prosecutor and enforcement attorney for the United States Securities and Exchange Commission, and the securities litigation law firm of Powers Taylor, LLP are investigating potential legal claims against the Board of Directors of Clinical Data, Inc. (“Clinical Data” or “CLDA”) (NASDAQ: CLDA) related to the proposed buyout of Clinical Data by Forest Laboratories, Inc. The definitive merger agreement, which was announced on February 22, 2011, involves an all-cash transaction valued at approximately $1.2 billion. Under the proposed buyout, Clinical Data shareholders will receive $30.00 in cash for each share of Clinical Data/CLDA common stock they hold. In addition, the agreement provides for a contingent payment of up to $6.00 per share over 7 years to investors upon the company’s drug Viibryd tm reaching specific milestones. The transaction is expected to close in the second quarter of 2011. The investigation relates to the fairness of the proposed transaction to Clinical Data shareholders, possible breaches of fiduciary duty and other violations of state law by the Board of Directors of Clinical Data for approving this transaction, and whether Clinical Data’s Board of Directors acted in the shareholders’ best interests. The acquisition price offered to Clinical Data shareholders represents an approximate 12% discount from Clinical Data’s closing price of $33.90 just days before the merger announcement. “Based on the fact that the acquisition price is below the company’s closing price just days before the acquisition announcement, and the fact that the additional compensation to shareholders is contingent and based on future performance of the company’s drug, which has not gone to market yet, we do not believe that the proposed acquisition is fair to Clinical Data shareholders. We want to ensure that the shareholders are receiving the maximum value for their stock,” said shareholder rights attorney Willie Briscoe.
Cheng Yi Liang, a chemist with the U.S. Food and Drug Administration, was charged by the Securities and Exchange Commission with insider trading on information regarding upcoming FDA drug approval decisions on Tuesday.