Valeant Pharmaceuticals International's former president must repay the drug maker at least $4.8 million over a bonus tied to a unit's aborted spinoff, a Delaware judge has ruled.
Valeant directors, led by former Chief Executive Milan Panic, violated their duties to shareholders by awarding the bonus to Adam Jerney after the company sold 20% of its Ribapharm hepatitis drug unit to the public, Chancery Judge Stephen Lamb found. A planned spinoff was later abandoned.
The "decision to pay cash bonuses was ill-advised and was not entirely fair to the company," Lamb wrote in a 47-page decision released Thursday. The process for deciding who got the cash awards "was deeply flawed with self-interest."
Aliso Viejo-based Valeant, formerly known as ICN Pharmaceuticals Inc., took over a lawsuit originally filed in Wilmington, Del., by shareholders. Panic, who stepped down from the company in June 2002, agreed in August to pay $20 million to settle claims over his $33-million bonus.