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Biovail Corporation has taken a page from the George Steinbrenner/Billy Martin playbook in order to reignite its well-publicized conspiracy suit against short-sellers and analysts. The Canadian drugmaker has rehired its former lead firm in the case � Kasowitz, Benson, Torres & Friedman. Biovail fired Kasowitz last March amid legal proceedings surrounding the company’s misuse of court-protected documents. The suit began in February 2006, when Biovail sued analysts and hedge funds, including SAC Capital and its founder Steven Cohen, in New Jersey state court. Biovail claims that it was the victim of a conspiracy to spread false information about it in an effort to depress its stock and profit. The company’s chairman at the time, Eugene Melnyk, appeared on 60 Minutes to tout the complaint. But the company’s suit has been stalled since January, when Manhattan federal district court judge Richard Owen ruled that Biovail violated a protective order in his courtroom where the company is a defendant in a shareholder class action. Specifically, Owen found that Biovail had used court-protected documents it had subpoenaed from Banc of America LLC to support its allegations in the New Jersey case. The dispute was embarrassing and costly for both Biovail and its lawyers. It was amidst the hearings that Biovail fired the Kasowitz firm. On Friday morning, the Kasowitz firm made its first appearance in New Jersey state court on behalf of Biovail since being fired. The company confirmed that it rehired Kasowitz but declined to elaborate on what led to the reconciliation. The news of Kasowitz’s return comes after a development on another front of the litigation. On Monday, Biovail announced a settlement with Banc of America LLC, whose former analyst, David Maris, is a defendant in the company’s suit. Biovail agreed to drop Maris from its suit. The impact of the settlement is in dispute. In a press release, Biovail claimed that the settlement would be “extremely helpful” in its suit, adding that Maris would provide key documents and testimony. But Maris’s lawyers at Morrison & Foerester responded with their own statement, countering that Maris was not cooperating with Biovail and that he did not believe that his testimony would help the company’s cause.

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