Litigation related to Abbott’s manufacture, sale, and recall of contaminated infant formula, leading to nationwide infant formula shortage.
Chicago, IL – Court-appointed Lead Counsel Cohen Milstein and Scott & Scott filed a consolidated complaint in In re Abbott Laboratories Infant Formula Shareholder Derivative Litigation, a massive shareholder derivative lawsuit brought against Abbott Laboratories’ Board of Directors for breaching their fiduciary duties related to the Company’s manufacture and sale of infant formula products, prompting a major recall and nationwide infant formula shortages and allegedly causing billions of dollars of damage to Abbott.
Plaintiffs also allege claims for insider trading, corporate waste, and unjust enrichment, as well as violations of the federal securities laws.
“Abbott’s Board breached its main duty to the Company: to oversee mission-critical risks in connection with the highly regulated manufacturing and sale of infant formula. The result was tragic for our nation’s families, resulting in a nationwide formula shortage and the deaths of multiple infants allegedly due to consuming Abbott’s tainted baby formula, and it has been catastrophic for Abbott’s business, leading to a DOJ consent decree and billions of dollars in damages. Cohen Milstein and Scott & Scott are proud to represent shareholders as lead counsel in this important shareholder derivative lawsuit to hold Abbott’s board of directors accountable,” said Carol V. Gilden, co-lead counsel in the lawsuit and partner at Cohen Milstein.
Abbott, an Illinois corporation, is one of the primary manufacturers of infant formula products in the U.S., previously producing 40% of all infant formula products consumed in the U.S. It is also the nation’s leading provider of infant formula to low-income families through the U.S. government’s Special Supplemental Nutrition Program for Women, Infants, and Children (“WIC”) program. On February 15, 2022, Abbott closed its Sturgis, Michigan infant formula manufacturing facility due to the FDA’s concerns about contaminated baby formula. Two days later, on February 17, 2022, Abbott announced a “voluntary” recall of infant formula products manufactured at the Sturgis plant.
The consequences were devastating. A nationwide shortage of baby formula ensued as the facility remained shut down for several months. Additionally, Abbott’s business suffered hundreds of millions in lost sales and profits and costs to remediate the facility and upgrade food safety compliance, risk management systems, and internal controls. The Company’s business and reputation were badly tarnished as it came under regulatory, criminal, and Congressional scrutiny. Abbott is now exposed to numerous lawsuits, including wrongful death, personal injury, and whistleblower actions, as well as consumer and investor class actions.
The consolidated shareholder derivative lawsuit was filed on behalf of court-appointed Lead Plaintiffs, pension funds, Teamsters Local No. 710 Pension Fund and SEPTA.
More information about the lawsuit can be found here.
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