June 29, 2023
- COURT: N.D. Ill
- TRACK DOCKETS: No. 1:23-cv-04142, No. 1:23-cv-04143
Abbott Laboratories, a major infant formula manufacturer, was hit with two shareholder derivative suits alleging its board breached fiduciary duties by not implementing stronger oversight in its formula production.
The suits center on Abbott’s Sturgis, Mich., plant that was shut down in 2022 after the Food and Drug Administration found deadly bacteria in its powdered infant formula, Similac, and the company recalled the product. The recall led to a nationwide formula shortage.
Now, two separate pension funds allege Abbott’s directors ignored safety concerns for years before the recall. Both filed their complaints in the US District Court for the Northern District of Illinois on Tuesday.
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In addition to alleging breaches of fiduciary duty related to the board’s oversight duties, the other complaint filed by the International Brotherhood of Teamsters Local 710 Pension Fund and the Southeastern Pennsylvania Transportation Authority, alleges insider trading by eight defendants.
That complaint alleges the eight defendants collectively sold over $163 million of Abbott stock at artificially inflated prices.
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Teamsters Local 710 Pension Fund and SEPTA are represented by Cohen Milstein Sellers & Toll PLLC and Scott + Scott Attorneys At Law LLP. Kehoe Law Firm PC also represents SEPTA.