Aerpio Sued Again Over Securities Violations via Proxy Statement

Aerpio Pharmaceuticals’ merger with Aadi has already sparked significant litigation; on Monday, plaintiff Sam Carlisle joined one of many individuals suing the company. The case, located in the District of Delaware, was filed against Aerpio and its Board of Directors and demands recourse over alleged violations of the Securities Exchange Act of 1934 (Exchange Act) and other Securities and Exchange Commission (SEC) rules.

The merger was announced in May 2021. Per the terms of the agreement, “each share of Aadi common stock will be converted into the right to receive approximately 4.9152 shares of Aerpio’s common stock.” Following the announcement of the merger, Aerpio filed a Proxy Statement with the SEC that recommended Aerpio shareholders to vote in favor of the deal. The plaintiff contends that the Proxy Statement both omitted and misrepresented important information that was necessary for shareholders to make an informed decision regarding the merger.

The complaint explained that “it is imperative that the material information omitted from the Proxy Statement is disclosed to the Company’s stockholder prior to the forthcoming stockholder vote.” Carlisle seeks to enjoin Aerpio from proceeding with the proposed transaction until the Proxy Statement is amended in a way that shareholders will be able to “properly exercise their corporate suffrage rights.” The statement is allegedly missing sufficient financial projections and financial analyses.

The plaintiff is represented by Long Law.