New York, NY: A $12.8 million settlement has been reached in a securities class action pending against the bankrupt KV Pharmaceutical Co. Preliminary approval was given in January from Judge Carol Jackson of the U.S. District Court for the Eastern District of Missouri.
Lead plaintiffs, Norfolk County Retirement System and the State-Boston Retirement System, and the rest of the class alleged KV made misstatements and omissions regarding its compliance with the FDA and with good manufacturing practices. And, therefore, the plaintiffs claimed, they purchased the defendants securities at artificially inflated prices and "were damaged as a result."
The lawsuit further claims that in 2008 KV ended production of much of its product line after issuing a recall of its painkillers due to the tablets being oversized.
A settlement hearing is scheduled for April 23.
The settlement with the bankrupt KV Pharmaceutical Co. entity will not affect the restructured KV Pharmaceutical, which emerged from Chapter 11 bankruptcy in September, according to the St. Louis Post-Dispatch.