FDA negotiations and law firm investigations
Did anyone else notice the flurry of law firms that announced they're investigating Invacare's board of directors following the company's Dec. 8 announcement that it would work with the FDA to negotiate an agreement to address concerns with two facilities?
Said agreement, called a consent decree, could possibly cease certain operations at Invacare's corporate headquarters and wheelchair manufacturing facility in Elyria, Ohio.
At last count, there were at least half a dozen law firms that made such announcements: Harwood Feffer; Rigrodsky & Long; Faruqi & Faruqi; Levi & Korsinsky; Bronstein, Gewirtz & Grossman; Kahn, Swick & Foti.
All of said law firms used similar wording in their press releases:
“(Insert name of law firm here) is investigating potential claims against the board of directors of Invacare concerning the company’s failure to comply with the federal regulations in its wheelchair manufacturing business. Our investigative concerns whether the board of directors has breached its fiduciary duties, mismanaged the company and/or wasted corporate assets at the expense of shareholders.”
They all want to talk to said shareholders about their "rights and interests with regard to this matter."
I asked Lara Mahoney, Invacare's director of investor relations and corporate communications, about this and she said these kinds of announcements are “fairly typical” for publicly traded companies whose stocks suffer a dramatic decline. Invacare saw its stock price drop from $20.58 to $14.70 on Dec. 8. It's $15.49 as we speak.
So what do investors and shareholders think about all of this?
“I have been on the phone with different investors and shareholders, and what we’ve been talking to them about is that we’re taking the situation seriously and that we’ve hired outside consultants to help,” she said. “We’ve been available to answer their questions.”