Problems continue to mount for KV Pharmaceuticals. Over the past two months, several groups of shareholders and former employees have filed suits against the company. The latest lawsuit was filed earlier this week in the District Court for the Eastern District of Missouri. The complaints allege that KV Pharmaceuticals misled shareholders about KV's compliance with federal regulations, as well as the company's performance, operations and outlook.
According to shareholders, KV continued to produce unsafe drug products in poorly managed facilities that did not meet the FDA's Good Manufacturing Practices. The complaint also alleges that not only did KV fail to recall unsafe drug products, but inefficiencies at the plants created a backlog that resulted in further loss of revenue and earnings.
Last year, federal regulators seized $24 million in drug products from KV's manufacturing facilities after the company ignored warnings to discontinue the manufacturing and distribution of unapproved products. Shareholders are also seeking damages for KV's failure to write-off that $24 million in discontinued products.
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