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Alcon starts lawsuit trust, focuses on Novartis

Thu, 07/08/2010 - 2:45am
The Associated Press

Alcon Inc.'s Independent Director Committee said Thursday it created a litigation trust with $50 million for litigation related to any deal between Alcon and a majority shareholder, with a focus on Novartis.

The trust was formed to provide funds to commence, defend or maintain a lawsuit. Novartis currently owns about 23 percent of Alcon and is trying to buy the company. It has offered up to $39 billion for Alcon.

The Novartis proposal is "grossly" inadequate, said Thomas G. Plaskett, chairman of the IDC, in a statement.

Without the Trust, once Novartis becomes Alcon's majority shareholder, it could attempt to make Alcon withhold funds from the Independent Director Committee and make it difficult for it to protect minority shareholders through a litigation strategy, the committee said in a statement.

Shares of Alcon, based in Switzerland, closed at $152.32 Wednesday. Shares of Novartis, also based in Switzerland, closed at $49.42.

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