A judge in Delaware has dismissed a shareholder's lawsuit accusing ICN Pharmaceuticals Inc.'s chairman, Milan Panic, of costing the Costa Mesa company millions of dollars through alleged sexual harassment of employees.
ICN stock owner Andrew White contended in his suit in Delaware Chancery Court that ICN was forced to pay more than $3 million to settle at least eight cases in which female employees accused Panic of making improper advances.
White asked a judge in Wilmington to award damages and fees and to make ICN set up workplace programs to combat such activities.
In a decision made public this week, Judge Stephen Lamb granted ICN's request to dismiss the suit. He concluded White's allegations were unsubstantiated, being based solely on a magazine article. Lamb also found White never asked the company's board of directors to remedy the situation before filing suit, as required by court rules.
The complaint contains allegations of misconduct but fails to provide "a sufficient basis to infer bad faith conduct on the part of the directors," Lamb wrote in his 30-page opinion.
The judge also said, "The complaint does not reveal that Panic has admitted wrongdoing or that any court has held him liable for sexual harassment."
All of the sexual harassment lawsuits have been resolved and there are no cases pending, said Cliff Saffron, an attorney for ICN.
In October 1998, ICN settled sexual harassment lawsuits brought by a human resources director and an executive secretary for undisclosed amounts. In 1996, a former secretary was awarded $3.6 million in a sexual harassment suit, an award the company made Panic pay. Also settled are suits filed by a trade show manager and a customer service representative.
In unrelated legal action, the Securities and Exchange Commission has a fraud lawsuit against the company pending in federal court in Los Angeles.
The SEC accuses the company of making misleading public statements and failing to disclose publicly that in November 1994, the Food and Drug Administration rejected ICN's application for approval of its ribavirin drug to treat hepatitis C liver disease.
ICN's shares closed Wednesday at $25.44, down 56 cents in trading on the New York Stock Exchange.