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Suit Seeks to Recover ICN Exec's Pay

Courts: Chairman's alleged harassment of women wrongly cost firm millions, shareholder says.

November 25, 1998| From Bloomberg News

ICN Pharmaceuticals Inc. has been sued by a shareholder who claims its chairman's alleged sexual harassment of employees wrongly cost the company millions of dollars.

The suit, filed Monday in Chancery Court in Wilmington, Del., says the company is believed to have spent $3.5 million or more to settle at least eight cases in which female employees claimed that ICN Chairman and Chief Executive Milan Panic groped them or asked for sex.

Shareholder Andrew White asks a judge to force Panic to pay back all compensation he received from the company while engaging in conduct that opened the company to liability. The suit also asks the judge to order Costa Mesa-based ICN to establish effective programs to prevent sexual harassment in the workplace and to award damages.

"As early as July 1992, company officials knew of Panic's proclivities and misconduct [but] adopted a corporate policy to keep sexual harassment claims quiet" while paying off the women, White alleges in the suit, which claims directors wasted corporate assets to the detriment of shareholders.

In a statement Tuesday, the company said it can't comment on specific allegations because it hasn't seen the lawsuit.

"We can say, however, that there has never been any court finding of sexual harassment or sexual misconduct of any kind against ICN or Mr. Panic," the company said.

The company settled the cases to avoid "management distractions and publicity," according to the statement. ICN also has a long-standing policy against sexual harassment, according to the statement.

ICN shares fell 13 cents to close at $25.50 on the New York Stock Exchange.

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