HALF A million dollars in legal fees incurred trying to unseat Elan chief executive Kelly Martin were reimbursed by the company when the men behind the campaign joined the company’s board last year, an affidavit has claimed.
The biotech company, which is embroiled in a battle with two of its own directors over alleged corporate governance breaches, paid $500,000 as part of an agreement with Vaughn Bryson and Jack Schuler which also saw the men elected to Elan’s board at an agm in July 2009.
The company this week secured a High Court injunction preventing the two men from burdening the company with additional legal costs to run their own investigation into their allegations of corporate governance breaches at a time when the board has already commissioned a legal review of those complaints.
According to an affidavit filed by Elan as part of the High Court action, Mr Bryson and Mr Schuler required Elan to indemnify them “in respect of legal costs previously incurred by the defendants” during their eight-month campaign attacking how Elan managed its business and its standards of corporate governance.
“The board concluded that it was in the best interests of the company to enter into the agreement [giving the men board seats] even if it was necessary to pay their costs,” the affidavit states.
Mr Schuler and Mr Bryson for their part agreed to “desist from further public disparagement” of the company, according to the affidavit.
The company has since referred to the US stock market regulator, the Securities and Exchange Board, matters relating to Mr Schuler. These are understood to relate to share dealings while a director of Elan.
Elan’s board is to meet in Dublin on Wednesday to discuss the report commissioned on the alleged corporate governance transgressions alleged by Mr Schuler and Mr Bryson.
