Ireland's Elan Corp has been granted an injunction in the High Court in Dublin to prevent two dissident directors from interfering with an independent review being carried out into corporate governance at the company.
Elan is taking the action against Vaughn Bryson, ex-chief executive at Eli Lilly and Jack Schuler, a former president at Abbott Laboratories, saying that their actions of late are prejudicing and undermining a probe being carried out by US law firm Atlanta-based McKenna, Long & Aldridge. Messrs Schuler and Bryson had threatened to take legal action in the USA which would interfere and derail the probe, Elan said, and the two dissidents had demanded that "they be given interim access to all McKenna Long investigation materials and that they be permitted at Elan’s expense to conduct their own, unauthorised review".
Messrs Bryson and Schuler, non-executive directors and long-time critics of the Dublin-headquartered group's management, had threatened a lawsuit so Elan says it had "no alternative but to present the issues raised for determination by the proper Irish court". The company adds that its actions "are intended simply to protect the ongoing independent review previously authorised by the audit committee of Elan's board of directors until the full board can consider its results at next week's board meeting and consider whether any further action is necessary".
Elan went on to say that the two men have violated their "fiduciary and contractual duties" and have been "acting in Elan’s name without its authority".
Messrs Schuler and Bryson were active investors who had raised a number of concerns with Elan management before being invited to join the board in June 2009. A number of issues have also been voiced by another investor, Ib Sonderby, who is expected to unveil "four potential directors for the Elan board" in a conference call tomorrow.
Ian Hunter, an analyst at Irish stockbroker Goodbodys, said "we presume that the current rift in the board is around those issues and the company's response to them". He added that "it can only be hoped that these difficulties in the boardroom do not detract management too much from the day-to-day running of the company".