Cardinal Health, Inc.
Robbins LLP served as lead counsel in derivative litigation on behalf of the plaintiff who brought claims against certain Cardinal Health officers and directors arising out of Cardinal’s proposed stock-for-stock acquisition of Syncor International Corp., which was at the time being investigated by the U.S. Securities and Exchange Commission for violations of the Foreign Corrupt Practices Act. The action sought to enjoin the acquisition if Cardinal did not renegotiate the price, which was artificially high due to Syncor’s accounting improprieties. The action forced Cardinal to reduce the previously negotiated acquisition price for Syncor, saving the company millions of dollars.
During the course of its work on the Syncor transaction, Robbins LLP and other firms discovered that Cardinal insiders had engaged in a massive revenue inflation scheme to fraudulently overstate the company’s financial performance. Robbins LLP filed an amended complaint against several of Cardinal’s officers and directors, defeated multiple motions to dismiss and pursued and reviewed millions of pages of documents in discovery. After five years of litigation, the firm ultimately negotiated and resolved the matter by obtaining $70 million for the company, among the largest monetary recoveries ever in a shareholder derivative action. The settlement also required Cardinal’s board of directors to implement significant corporate governance and internal accounting controls designed to improve the board’s oversight of Cardinal’s senior management and to prevent the recurrence of the alleged accounting manipulations.
Staehr v. Walter, No. 02-CVG-11-0639 (Ohio Ct. C.P.-Del. Cnty. Dec. 17, 2007)