Valeant, Ackman will split the bills for years-long Allergan shareholder suit

Valeant
Valeant and Bill Ackman's Pershing Square are splitting up forthcoming legal fees as they battle Allergan shareholders in an insider trading lawsuit.

Valeant and Bill Ackman’s Pershing Square Capital Management have been battling Allergan shareholders for years over the duo’s failed hostile-takeover attempt of the company. And with the legal war still ongoing, the partners have agreed to split the tab.

Last week, Valeant and Pershing Square struck an agreement to split the next $10 million in legal fees and litigation expenses down the middle, according to an SEC filing. And if they reach a settlement with Allergan’s investors that both parties approve, Valeant will pick up 60% of the tab, while Pershing Square will pay the remaining 40%.

Allergan investors first sued the Valeant-Ackman team back in August 2014 amid its hostile pursuit of the company. The way shareholders saw it, Ackman’s purchase of a 9.7% stake in Allergan—meant to help Valeant pull off the takeover—constituted insider trading. After all, the value of Ackman’s shares skyrocketed after the Valeant proposal went public. A judge rejected arguments to dismiss the suit that November.

Valeant began unraveling not long after its Allergan quest came up empty, and these days it can use any help with fines and fees that it can get. Along with political pricing pushback and a slew of investigations, debt-default concerns plagued the Canadian pharma through much of last year, plunging its stock price into the doldrums.

Pershing Square hasn’t fared all that well, either. Post-Allergan, Ackman raised his stake in Valeant to signal his continued confidence—a move that backfired badly when Valeant began its downward spiral.

Ackman now serves on Valeant’s board along with fellow Pershing Square exec Stephen Fraidin, though so far the company’s turnaround efforts have been slow-going. In January, the company announced a pair of asset-sale deals to help it shave $2.1 billion off its debt mountain.