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Move over, Martha � ImClone Systems Incorporated isn’t the only biotech company taking heat for a stock deal. Two shareholders in Genzyme Corporation are trying to undo the company’s June 30 buyback of stock in two of its divisions. The investors, Rory Riggs and John Lewis, originally tried to block the transaction by filing suit in Manhattan federal district court. But after the buyback went ahead anyway, they amended their complaint to seek its recission and damages of about $40 million. Based in Cambridge, Massachusetts, Genzyme is a global biotech concern comprised of three separate units: Genzyme Biosurgery (formerly Biomatrix, Inc.), Genzyme Molecular Oncology, and Genzyme General. In May the company’s board called for a forced exchange of the Biosurgery and Oncology stocks for General stocks, and a consolidation of all the stocks under the name Genzyme General. But Riggs, former president of Biomatrix, and Lewis, president of Gardner Lewis Asset Management, balked at the deal. The two investors, who owned almost 2 million Biosurgery shares combined, claim that Genzyme intentionally withheld positive information about Biosurgery in order to buy back the stock at a depressed price. Genzyme reacquired the Biosurgery stock at $1.77 per share; Riggs and Lewis allege that its market value was $20 � $40 per share. As of press time Judge Louis Stanton had denied the plaintiffs’ request for a scheduling conference and had yet to rule on Genzyme’s motion to dismiss their lawsuit. Genzyme also faces a class action suit in Massachusetts state court alleging that its directors breached their fiduciary duty to all Biosurgery shareholders under the forced exchange. For plaintiffs Rory Riggs and John Lewis Boies, Schiller & Flexner (Armonk, New York): George Frampton, Jr., Philippe Selendy, Jonathan Sherman, and associates Kevin Anthony, Elizabeth Bowyer, Dara Burns, Paul Kunz, Frank Moore III, and Alanna Rutherford. (Frampton, Sherman, Anthony, Burns, Kunz, and Rutherford are in the firm’s Washington, D.C., office; Selendy, Bowyer, and Moore are in New York.) For defendants Genzyme Corporation et al. (Cambridge, Massachusetts) In-house: Senior vice president, general counsel, and chief patent counsel Thomas DesRosier, executive vice president � legal (Genzyme Molecular Oncology) Peter Wirth, vice president and deputy general counsel Robert Hesslein, and managing corporate counsel Gerald Quirk. Ropes & Gray (Boston): John Donovan, Jr., Paul Kinsella, William Sussman, and associates Robert Jones and Darcy Shearer. (Sussman is in the firm’s New York office.) Kinsella brought the client with him from his former firm, Palmer & Dodge.

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