New York, NY: (Aug-09-07) A shareholder class action lawsuit was brought against US biotechnology company Genzyme Corp. The suit stemmed from Genzyme's consolidation in 2003 of its stock structure from three publicly traded units into one main Genzyme stock. Company officials stated that the company used a formula in its charter to determine the share prices for the purpose of exchanging shares from the smaller oncology and biosurgery businesses. Some biosurgery shareholders felt the timing of the consolidation hurt the value of their holdings and that resulted in the filing of the class action lawsuit against the company.
The company entered into an agreement to settle the class action with a $64 million payout. Under the terms of the agreement, which are subject to court approval, Genzyme will pay the $64 million to a class of shareholders who held Genzyme Biosurgery stock on May 8, 2003. As a result of the settlement agreement, the suit, which was filed in US District Court in New York, will be dismissed and an elated case pending in Massachusetts will also be dismissed. The settlement includes no admission of any wrongdoing by the company. [REUTERS: GENZYME SECURITIES]
