William Noble Burkhart, Derivatively on Behalf of Nominal Defendant INOTIV, INC., v. Robert W., Leasure, Jr., Beth A. Taylor, Gregory C. Davis, Richard A. Johnson, John E. Sagartz, R. Matthew Neff, Nigel Brown, and Scott Cragg, and INOTIV, INC.
William Burkhart, an investor in drug research and development company Inotiv Inc., filed a derivative suit against several of the company's officers and directors, accusing them of failing to disclose that a recently acquired subsidiary, Envigo RMS Holding Corp., was under investigation by the U.S. Department of Justice (DOJ) for Animal Welfare Act violations. Envigo made headlines last year after the DOJ filed suit over the alleged mistreatment of beagles at its Cumberland, Virginia research facility, resulting in the surrender of more than 4,000 dogs. Burkhart alleges that Inotiv issued a false proxy statement that omitted information about Envigo being on notice from several governmental agencies about existing animal welfare violations when soliciting stockholder votes for the merger. Plaintiff is seeking damages, restitution, attorney fees, a jury trial and directives for Inotiv to improve and reform its corporate governance and internal procedures.
[To accompany Federal Court Case Law Update "Envigo Parent Company Faces Derivative Suit for Failing to Disclose DOJ Investigation to Shareholders Prior to Merger" from Brooks Animal Law Digest Issue No. 172.]