- Carl Icahn has filed a lawsuit to remove multiple people from Illumina’s board of directors and cover the costs of the unraveling acquisition of Grail, according to a court document published by Bloomberg Law.
- Icahn, working as an activist investor, led a campaign that ousted John Thompson from the role of Illumina’s board chair, adding a candidate proposed by Icahn. Francis DeSouza stepped down as CEO shortly after surviving the proxy vote.
- Now, Icahn is seeking to remove people from the board of directors on the grounds that they breached their duties through their “bad faith pursuit of their ‘holy grail’ acquisition,” including former Food and Drug Administration Commissioner Scott Gottlieb. An Illumina spokesperson declined to comment on the lawsuit.
The Icahn lawsuit rests on the claims that Thompson, DeSouza and board members breached their fiduciary duties during the acquisition of the liquid biopsy company Grail and in its aftermath. Icahn has accused the defendants of making “inadequate, partial and misleading disclosures” that affected the vote on board membership.
Having only won a partial victory in the proxy battle, Icahn is attempting to use the allegation to reshape the board of Illumina through the courts. The suit demands that the re-election of each “conflicted director” is rendered void.
Icahn wants the directors removed or for Illumina to hold a new election process.
The lawsuit also calls for the award of damages. Icahn is pushing for damages of at least $476 million, the amount the European Commission fined Illumina over the Grail takeover, plus however much the company paid in relation to the Commission’s hold-separate and divestiture orders and in legal fees related to the acquisition in the U.S. and Europe .
Large sections of the lawsuit are redacted, meaning details about key accusations such as how the board members allegedly entrenched themselves “through misleading disclosures and other machinations” are hidden, but the outline of Icahn’s argument is clear. The board members voted to break the law by backing the Grail acquisition, according to the lawsuit, and face personal liability for their actions.
If Icahn gets his way, the defendants will be penalized for their actions and made to share information about the Grail acquisition through “supplemental and corrective disclosures” to the 2023 proxy filings.
The case comes as Illumina prepares to undo the Grail takeover after losing its fight with European officials, although it could still get the decision overturned in the courts.