Proxy battle brewing over Biovail

Eugene Melnyk (photo) said he'd do it, and now he has. The founder of Canada's Biovail launched a proxy battle for the company, looking to sweep out its board and senior management. Melnyk has a dissident group of shareholders backing him; in a proxy circular distributed by the group, Melnyk claims that Biovail is a "broken company in desperate need of change." They say they would hire a former chief, Bruce Brydon, as CEO and install "industry leaders" as board members. Melnyk himself would not serve.

This is just the latest in a series of tumultuous--some might say unfortunate--events at Biovail, which has faced litigation and regulatory problems over the past five years. Melnyk ran afoul of securities regulators, along with three other current and former execs. The company paid $138 million last year to settle a class-action suit. And recently, Biovail agreed to pay almost $25 million to settle corruption and conspiracy charges stemming from a product launch when Melnyk ran the company.

- read the Financial Times story
- see Biovail's response in BusinessWeek