A suit was filed on Friday in the Northern District of California by plaintiff Sebastian Meinking against defendant ChemoCentryx, Inc. and its board of directors. The complaint alleged that the defendants violated the Securities Exchange Act of 1934 when they filed a materially deficient proxy statement with the SEC regarding a proposed merger.
Recently, the complaint says, ChemoCentryx made plans to become acquired by Amgen, Inc. Under the agreement, documents say, Amgen will acquire any outstanding shares of ChemoCentryx’s for $52.00 per share, making ChemoCentryx an indirect wholly-owned subsidiary of Amgen.
Last week, according to the complaint, the defendant filed a proxy statement with the Securities and Exchange Commission (SEC) in support of the deal.
The plaintiff argues that the defendant’s proposed transaction is unfair. Specifically, he claims that the defendant is only entering into the proposed transaction “to procure for itself and senior management of the Company significant and immediate benefits with no thought to Plaintiff, as well as the Company’s public stockholders.”
Meinking contends that the defendants filed a materially deficient proxy statement with the SEC in an effort to convince stockholders like the plaintiff to vote in favor of the merger. However, by omitting key information, the proxy statement allegedly deprives stockholders of their ability to “make an intelligent, informed and rational decision of whether to vote in favor of the proposed transaction, and is thus in violation of the Exchange Act.”
The proxy statement, Meinking maintains, either omits or misrepresents information including the sales process and conflicts of interest for management, financial projections, data and inputs underlying the financial valuation analyses, and more. Meinking asserts that the defendants “were privy to non-public information concerning the company and its business and operations,” such that “they knew or should have known that the Preliminary Proxy Statement was materially misleading.” Meinking explains in the complaint that if the proposed transaction between ChemoCentryx and Amgen is consummated, he will experience irreparable injury.
The complaint cites two violations of the Exchange Act. Meinking is seeking an injunction preventing the proposed transaction, and in the event that it is consummated, an award of rescissory damages to the plaintiff. Further, Meinking is seeking an order requiring the defendant to comply with the Exchange Act and disseminate an amended proxy statement, litigation fees, a trial by jury, and any other relief deemed just by the court.
The plaintiff is represented by Brodsky & Smith.
