An investor in Myovant Sciences Ltd. is seeking another hearing to address allegations of a conflict of interest involving the law firm Skadden, Arps, Slate, Meagher & Flom LLP. The investor’s claims arose from Skadden’s advisory role in Myovant’s 2022 buyout deal. The appellate court is being asked to reconsider these claims after the US Court of Appeals for the Second Circuit upheld the dismissal of the case last month. According to the court, the alleged connections between the acquiring company, Sumitovant Biopharma Ltd., and Sumitomo Mitsui Banking Corp. — which Skadden represented in other dealings — were deemed “too attenuated” to warrant further investigation.
The lawsuit, brought by investor Joseph Zappia, challenges whether Skadden should have disclosed its connections with Sumitomo Mitsui, arguing they posed a potential conflict of interest. Despite the dismissal of the case, which was affirmed with prejudice, Zappia is pressing for the appellate court to reconsider its stance on his petition, which was rejected without the opportunity to amend the complaint. The original claims are based on perceived oversight in evaluating how the legal advisory role may have been compromised by external affiliations.
The case underscores the complexities of managing conflicts of interest in high-stakes mergers and acquisitions, a situation further complicated when legal advisors have multiple associations with entities involved in a transaction. This example highlights the importance of disclosure and due diligence to mitigate conflict perceptions in corporate legal practices. For additional context on the initial litigation efforts, see here.
For a more detailed examination of the appellant’s current actions and the court’s previous determinations, visit the full article on Bloomberg Law.