UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION

Transcription

1 Case :-cv-0-doc-an Document - Filed 0/0/ Page of Page ID #: O RANGE COUNTY 0 0 LATHAM & WATKINS LLP Peter A. Wald (Bar No. 0) peter.wald@lw.com 0 Montgomery Street, Suite 000 San Francisco, California - Telephone: Facsimile: LATHAM & WATKINS LLP Michele D. Johnson (Bar No. ) michele.johnson@lw.com 0 Town Center Drive, 0th Floor Costa Mesa, California - Telephone: Facsimile: Attorneys for Plaintiffs ALLERGAN, INC. and KARAH H. PARSCHAUER ALLERGAN, INC., a Delaware corporation, and KARAH H. PARSCHAUER, an individual, v. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA Plaintiffs, VALEANT PHARMACEUTICALS INTERNATIONAL, INC., VALEANT PHARMACEUTICALS INTERNATIONAL, AGMS, INC., PERSHING SQUARE CAPITAL MANAGEMENT, L.P., PS MANAGEMENT, GP, LLC, PS FUND, LLC and WILLIAM A. ACKMAN, an individual, and Does - 0, Defendants. SOUTHERN DIVISION CASE NO. :-cv-0-doc (ANx) MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS EX PARTE APPLICATION FOR EXPEDITED PROCEEDINGS Judge: Ctrm: Hon. David O. Carter D CASE NO. :-CV-0-DOC (ANx)

2 Case :-cv-0-doc-an Document - Filed 0/0/ Page of Page ID #: O RANGE COUNTY 0 0 TABLE OF CONTENTS ii Page I. INTRODUCTION... II. EX PARTE NOTICE... III. STATEMENT OF FACTS... A. Defendants Acquisition of Allergan Stock... B. Allergan s Stockholder Rights Plan... C. Defendants Anticipated Special Meeting Request... IV. ARGUMENT... A. Expedited Proceedings Are Appropriate Under Rule... B. Expedited Proceedings Are Also Appropriate Under Rule and The Court s Inherent Authority... V. CONCLUSION... CASE NO. :-CV-0-DOC (ANx)

3 Case :-cv-0-doc-an Document - Filed 0/0/ Page of Page ID #: O RANGE COUNTY 0 0 TABLE OF AUTHORITIES CASES Apache Corp. v. Chevedden, No. :-cv-00-lhr (S.D. Tex. Feb., 0)... 0 Beacon Looms, Inc. v. S. Lichtenberg & Co., F. Supp. 0 (S.D.N.Y. )... Express Scripts Holding Co. v. Chevedden, No. :-cv-0s0-jar (E.D. Mo. Jan., 0)..., 0 Hasbro Bradley, Inc. v. Sparkle Toys, Inc., 0 F.d (d Cir. )... Klungvedt v. Unum Grp., No. :-CV-00 JWS, 0 WL (D. Ariz. June, 0)..., Landis v. N. Am. Co., U.S. ()... Moore Corp. v. Wallace Computer Servs. Inc., F. Supp. 0 (D. Del. )... 0 Neuberger Berman Real Estate Income Fund, Inc. v. Lola Brown Trust, F. Supp. d (D. Md. 00)... 0 NobelBiz, Inc. v. Wesson, No. -CV0 W JLB, 0 WL (S.D. Cal. Apr., 0)... SEC v. Wilde, No. SA CV -0-DOC (AJWx), 0 WL 0 (C.D. Cal. May 0, 0)... Selectica, Inc. v. Versata Enters., Inc., No. -VCN, 00 WL 00 (Del. Ch. Feb., 00)... Semitool, Inc. v. Tokyo Electron Am., Inc., 0 F.R.D. (N.D. Cal. 00)... Sierra Foothills Pub. Util. Dist. v. Clarendon Am. Ins. Co., No. CV-F-0- REC/LJO, 00 WL 0 (E.D. Cal. Aug., 00)... 0 StreamCast Networks, Inc. v. IBIS LLC, No. CV 0-0 MMM (Ex), 00 WL 0 (C.D. Cal. May, 00)... 0 Temp-Resisto Corp. v. Glatt, F.R.D. (D.N.J. )... iii CASE NO. :-CV-0-DOC (ANx)

4 Case :-cv-0-doc-an Document - Filed 0/0/ Page of Page ID #: O RANGE COUNTY 0 0 Tri-State Generation & Transmission Ass n, Inc. v. BNSF Ry. Co., No. CV0--PHX-MHM, 00 WL 0 (D. Ariz. June, 00)... STATUTES U.S.C. u-(b)()(b) (0)... Fed. R. Civ. P. (a)()(a)... Fed. R. Civ. P. (d)()... Fed. R. Civ. P.... iv CASE NO. :-CV-0-DOC (ANx)

5 Case :-cv-0-doc-an Document - Filed 0/0/ Page of Page ID #:0 0 0 I. INTRODUCTION Plaintiff Allergan, Inc. ( Allergan or the Company ) is in the midst of a live takeover battle. On June, 0, Defendant Valeant Pharmaceuticals International, Inc. ( Valeant ) acting with the support of Defendants Pershing Square Capital Management, L.P. ( Pershing Square ), William Ackman, and PS Fund, LLC ( PS Fund ) (collectively, the Pershing Square Defendants ) launched a tender offer directly to Allergan s stockholders, seeking to acquire complete ownership of Allergan. Before doing so, Valeant privately told Pershing Square of its plans. With inside knowledge of those plans, PS Fund bought up almost 0% of Allergan s stock for roughly $. billion. When Valeant subsequently announced its takeover plans, PS Fund s interest in Allergan skyrocketed in value by over $. billion. This lawsuit raises the critical question of whether PS Fund s trades in Allergan s stock, and Valeant s exchange of nonpublic information with Pershing Square concerning its takeover plans, violated the Securities Exchange Act of (the Exchange Act ). These questions of federal law should be resolved before Valeant and Pershing Square are allowed to proceed. Relatedly, Allergan claims that Valeant s and Pershing Square s July, 0 proxy statement, filed in connection with their efforts to call a special meeting of Allergan stockholders, contains false and misleading information and material omissions. This question should be resolved promptly as well, so that Allergan stockholders can properly evaluate the proxy statement. The urgency of these questions is heightened by Valeant s and Pershing Square s attempts to replace the Allergan board of directors. When Valeant announced its unsolicited takeover bid, Allergan s board enacted a stockholder rights plan (sometimes referred to as a poison pill ), which effectively prevents any one group of stockholders from amassing a larger stake in Allergan thus O RANGE COUNTY CASE NO. :-CV-0-DOC (ANx)

6 Case :-cv-0-doc-an Document - Filed 0/0/ Page of Page ID #: 0 giving Allergan s board time to consider Valeant s offer. Before Valeant can proceed with any tender offer, it must remove this stockholder rights plan. Valeant and Pershing Square have publicly stated that they plan to remove the poison pill by removing six members of the Allergan board at a special meeting, and thereafter installing directors who will be receptive to Valeant s takeover plan. Allergan s bylaws provide that in order to call such a special meeting, the holders of % of Allergan s stock must submit valid request forms. Defendants have stated publicly that they expect to present such forms to Allergan s board this month. Under Allergan s bylaws, once those forms are submitted, the board must evaluate the requests and determine whether to hold a special meeting within a reasonable period of time. At the same time, Allergan s bylaws also provide that the board shall not call a special meeting if the request forms have been solicited or secured through violations of the Exchange Act or other applicable laws. Allergan is committed to the stockholder franchise and does not want unnecessarily to delay the special meeting if and when the required request forms are submitted unless there have been violations of federal law. An adjudication of Allergan s claims on an expedited schedule is needed in order to resolve these important issues of federal law, in a time frame that will enable the board properly to consider its duties with respect to any request for a special meeting. 0 II. EX PARTE NOTICE At approximately :00 a.m. PT on August, 0, counsel for Plaintiffs (Peter A. Wald, Michele D. Johnson, and Colleen C. Smith, of Latham & Watkins LLP) met and conferred with counsel for Defendants (Jay Lefkowitz, Kirkland & Ellis LLP, Brian Frawley, Sullivan & Cromwell LLP, and Brian Breheny, Skadden, Arps, Slate, Meagher & Flom LLP) regarding Plaintiffs proposal to expedite proceedings in this case. Declaration of Colleen C. Smith ( Smith Decl. ). Counsel for Defendants agreed to consider this proposal. Id. Defendants counsel indicated that they had not yet determined whether Defendants would O RANGE COUNTY CASE NO. :-CV-0-DOC (ANx)

7 Case :-cv-0-doc-an Document - Filed 0/0/ Page of Page ID #: move to dismiss the Complaint. Id. On the same day, at : p.m. PT, Plaintiffs counsel provided notice of this ex parte application and Plaintiffs proposed expedited schedule to Defendants counsel. Id.,, Ex. I. As of the time of filing, the parties are continuing to meet and confer regarding Plaintiffs scheduling proposal. Id.. III. STATEMENT OF FACTS This lawsuit arises from actions taken by Valeant and the Pershing Square 0 0 Defendants in furtherance of Valeant s ongoing effort to acquire all outstanding shares of Allergan stock through an unsolicited exchange offer (the Proposed Transaction ). Having planned to make a hostile bid for Allergan for some time, and after taking substantial steps toward such a bid, Valeant officially launched the Proposed Transaction on June, 0. Compl. (Dkt No. ) & Compl. Exs. B, C. Valeant is proposing to acquire all of Allergan s shares for a combination of cash and Valeant common stock valued at approximately $ billion. On August, 0, Plaintiffs filed this lawsuit against Defendants alleging violations of Sections (d), (a), (d), and (e) of the Exchange Act, and the rules promulgated thereunder. See id. Plaintiffs complaint lays out in detail Defendants violations of Section (e) and Rule e-, which proscribe insider trading, and identifies the material information that Defendants omitted or misrepresented in connection with the Proposed Transaction, including omissions in their Schedule D filings with the SEC. Neither the Allergan board nor Allergan stockholders should be forced to make important decisions regarding Defendants request for a special meeting or the Proposed Transaction until these claims are resolved. Plaintiffs complaint, accordingly, seeks a declaration that Defendants violated these federal securities laws. A. Defendants Acquisition of Allergan Stock Valeant is a Canadian pharmaceutical company that has rejected conventional research and development in favor of rapid growth through a series of O RANGE COUNTY CASE NO. :-CV-0-DOC (ANx)

8 Case :-cv-0-doc-an Document - Filed 0/0/ Page of Page ID #: 0 0 acquisitions fueled by debt. Id.,. Pershing Square, led and controlled by Mr. Ackman, is an activist hedge fund that provided financing for Valeant in its pursuit of Allergan, and reaped windfall profits once Valeant s Proposed Transaction was announced. Id., 0,. In February 0, Valeant began to take substantial yet undisclosed steps towards a hostile bid for Allergan, including retaining financial and legal advisors, holding multiple board meetings, and entering into contractual and financial arrangements to further the takeover. At roughly the same time, Valeant and the Pershing Square Defendants embarked on their unlawful scheme, which started with the formation of the acquisition vehicle, PS Fund. Id. -. Thereafter, in a series of complex and undisclosed transactions taking place between February and April, 0, PS Fund quickly acquired.% of Allergan s stock, primarily through its purchases of over-the-counter call options and equity futures. Id., -. On April, 0, Defendants went public with their relationship by filing Schedule D disclosures with the Securities and Exchange Commission (the SEC ), disclosing PS Fund s.% stake in Allergan. See id. PS Fund thereby became Allergan s largest stockholder. Once Valeant s bid became public, the price of Allergan shares rose sharply, increasing the value of the Pershing Square Defendants investment by over $. billion. Id.,. B. Allergan s Stockholder Rights Plan Faced with this sudden disclosure of Valeant s control intentions, on April, 0, Allergan s board, in consultation with its financial and legal advisors, adopted a one-year stockholder rights plan, which would be triggered if any single person or group acquired more than 0% of Allergan s stock. Smith Decl. Ex. A Over-the-counter options and equity futures may be individually structured and are traded between two private parties; they are not listed on a public exchange. Allergan s stock price has remained affected by Valeant s announced takeover plans. O RANGE COUNTY CASE NO. :-CV-0-DOC (ANx)

9 Case :-cv-0-doc-an Document - Filed 0/0/ Page of Page ID #: 0 0 (Allergan Form -K, Apr., 0). O RANGE COUNTY Among other reasons, the board adopted the rights plan to afford itself time to evaluate Valeant s offer and any offers received from other bidders. Id. From the beginning, Pershing Square and its allies attempted to pressure Allergan to negotiate with Valeant. Compl.. Allergan s directors, noting the Company s long-term strategic plan and concerns in the market regarding Valeant s long-term profitability and business model, determined that the value of the deal being offered to Allergan s stockholders in exchange for their shares was inadequate, and therefore declined to engage with Valeant. See id. -. C. Defendants Anticipated Special Meeting Request In light of the Allergan board s determination that Valeant s proposal undervalued Allergan, Pershing Square called for a special meeting of stockholders to amend Allergan s bylaws and pack the board with sympathetic directors. Id., 0. With a board of their choosing in place, Defendants hope to undo the stockholder protection provisions of Allergan s certificate of incorporation and A stockholder rights plan, also referred to as a poison pill, issues rights to all existing corporate stockholders, with the exception of the hostile potential acquirer, to acquire stock of the target company at prices significantly below market. Allergan s stockholder rights plan provides that Allergan stockholders of record at the close of business on May, 0, will receive one poison pill right for each share of Allergan common stock held on that date. Smith Decl. Ex. A. Subject to limited exceptions, the rights under the plan are triggered if a person or group acquires beneficial ownership of 0% or more of Allergan s common stock thereby triggering the plan. Id. In that situation, each holder of a right would be entitled to purchase a number of Allergan s common shares for $00 that have a market value of double the exercise price of the right. Id. Allergan s rights plan expires on April, 0. Id. [P]oison pills remain a common feature of the corporate landscape, and Delaware courts have repeatedly upheld their adoption as consistent with a board s fiduciary duties and business judgment. Selectica, Inc. v. Versata Enters., Inc., No. -VCN, 00 WL 00, at * (Del. Ch. Feb., 00). At the time, Allergan s certificate of incorporation already contained restrictions on business combinations with interested shareholders, including holders of % or more or Allergan s stock. See Smith Decl. Ex. B (Amended and Restated Certificate of Incorporation, Art. ). The new stockholder rights plan, which vests automatically if an interested party s beneficial ownership in Allergan shares exceeds 0%, augments these existing protections. CASE NO. :-CV-0-DOC (ANx)

10 Case :-cv-0-doc-an Document - Filed 0/0/ Page 0 of Page ID #: 0 0 bylaws and pave the way for Valeant s exchange offer to proceed without opposition. To accomplish these goals, on July, 0, Pershing Square filed a definitive proxy statement with the SEC seeking to solicit proxies for a special stockholder meeting. Id. & Compl. Ex. A. Since then, Defendants have been attempting to gather the necessary request forms from % of Allergan s stockholders, and claim to be nearing that goal. As recently as July, 0, the Wall Street Journal reported that Valeant expects that by the end of August, Mr. Ackman will have lined up at least the % of stockholders necessary to ask Allergan for a special meeting to elect new board members who would support a [Valeant/Allergan] combination, and that the Proposed Transaction would likely close by the end of the year. Smith Decl. Ex. D (Jonathan D. Rockoff & Anna Prior, Valeant Makes Another Allergan Pitch, Reports Higher Profit (July, 0, : PM)). Indeed, during Valeant s earnings call for the second quarter of 0 held on July, 0, both Valeant s Chief Financial Officer, Howard Schiller, and Chief Executive Officer, J. Michael Pearson, expressed confidence that the request forms calling for a special meeting of Allergan s stockholders would be delivered to Allergan this month August 0. See Smith Decl. Ex. E (Valeant Q 0 Earnings Call, July, 0) at ( Pershing Square... expects that votes to call the special meeting will be presented to Allergan for certification in August. ). Pursuant to Allergan s bylaws, special meetings of the Company s stockholders may be called upon the presentation of valid written requests of the holders of record of at least % of the outstanding shares of Allergan common stock. Smith Decl. Ex. C (Amended and Restated Bylaws), Art. II, (B)(). The certificate and bylaws contain a number of conditions that must be satisfied in order for the request forms to be valid. Id. (A). For example, the stockholders submitting the special meeting requests must hold their shares through the date of O RANGE COUNTY CASE NO. :-CV-0-DOC (ANx)

11 Case :-cv-0-doc-an Document - Filed 0/0/ Page of Page ID #: 0 0 the special meeting (id. (A)()), must provide a brief statement of the purpose of the special meeting requested (id. (A)()), and must disclose the nature of their interest in the proposals to be acted upon during the special meeting, including any arrangements or understandings the stockholders have with other stockholders requesting a special meeting (id. (A)()). In addition to these requirements, any person seeking to convene a special meeting of the stockholders must: comply with all requirements of applicable law, including all requirements of the Exchange Act, with respect to any request to fix a Special Meeting Request. Id. Art. II, (B)() (emphasis added). The bylaws further provide that the Company s Secretary: shall not accept, and shall consider ineffective, a Special Meeting Request if... (f) such Special Meeting Request was made in a manner that involved a violation of Regulation A under the Exchange Act, or other applicable law. Id. Art. II, (B)() (emphasis added). Upon presentation of any request forms, Allergan s board may take a reasonable amount of time to assess whether those requests comply with Allergan s certificate and bylaws. See id., Art. II, (B)(). If the meeting request forms satisfy the requirements, then Allergan s Secretary shall call a special meeting by setting a record date and meeting date. See id. On the other hand, if Allergan s board determines that any special meeting request was not properly made in accordance with Allergan s certificate or bylaws, the board is not required to take any action in connection with the requested special meeting, and, in particular, the Secretary shall not call the meeting if the Special Meeting O RANGE COUNTY CASE NO. :-CV-0-DOC (ANx)

12 Case :-cv-0-doc-an Document - Filed 0/0/ Page of Page ID #: 0 0 Request was made in a manner [that violates] Regulation A under the Exchange Act or other applicable law. Id., Art. II, (B)(). While the bylaws do not fix a deadline by when the stockholder-requested special meeting must be held, it must be set within a reasonable period of time. See id. Art. II, (D). IV. ARGUMENT A. Expedited Proceedings Are Appropriate Under Rule Rule of the Federal Rules of Civil Procedure expressly authorizes courts to order a speedy hearing of a declaratory-judgment action as permitted by the Declaratory Judgment Act, U.S.C. 0(a) (0). Fed. R. Civ. P.. Where a party here, Plaintiffs seeks declaratory relief, the Rule places no limitations on when expedited proceedings are appropriate. Courts thus apply this provision liberally, expediting proceedings based on the request of a party. See Temp- Resisto Corp. v. Glatt, F.R.D., (D.N.J. ) ( [I]f either party so requests, the Court will exercise the authority given it in Rule to advance the trial of the action on the calendar. ); see, e.g., Smith Decl. Ex. G (Order, Express Scripts Holding Co. v. Chevedden, No. :-cv-0s0-jar (E.D. Mo. Jan., 0), ECF No. ) (granting plaintiffs motion for expedited briefing schedule and speedy hearing); Klungvedt v. Unum Grp., No. :-CV-00 JWS, 0 WL, at * (D. Ariz. June, 0) (granting Rule motion and ordering discovery and briefing schedule); Beacon Looms, Inc. v. S. Lichtenberg & Co., F. Supp. 0, (S.D.N.Y. ) (ordering parties to submit discovery schedule to allow court to try matter expeditiously), abrogated in part on In lieu of calling the stockholder-requested special meeting, under the bylaws the board may set its own meeting of stockholders within 0 days of receipt of a special meeting request. Id. Art. II, (B)(). While this 0-day provision does not directly apply to the stockholder-requested special meeting, Defendants have publicly expressed the view that Allergan must call the stockholders special meeting within 0 days of a valid request. Smith Decl. Ex. E at (Mr. Pearson: Pershing is intending to deliver the requisite number of proxies in mid-august and once they re certified, Allergan has no can t call a meeting at any fewer than 0 days and they have up to 0 days. ). O RANGE COUNTY CASE NO. :-CV-0-DOC (ANx)

13 Case :-cv-0-doc-an Document - Filed 0/0/ Page of Page ID #: 0 0 other grounds by Hasbro Bradley, Inc. v. Sparkle Toys, Inc., 0 F.d (d Cir. ); see also Tri-State Generation & Transmission Ass n, Inc. v. BNSF Ry. Co., No. CV0--PHX-MHM, 00 WL 0, at * (D. Ariz. June, 00) (denying request to bifurcate but setting expedited schedule governing case); Smith Decl. Ex. F (Scheduling Order, Tri-State Generation, No. CV0--PHX-MHM (D. Ariz. June, 00), ECF No. 0) (setting three-month discovery schedule). And while urgency may inform the need for expedited proceedings under Rule, a showing of urgency is not required. Klungvedt, 0 WL, at * ( A showing of urgency is not required by the relevant statute or the law of [the Ninth] [C]ircuit. ). As set out in Klungvedt, expedited discovery in advance of the hearing may also be granted to enable the court to resolve the parties claims. See id. (granting sixty-day discovery period). A speedy adjudication pursuant to Rule, including a briefing and discovery schedule that accommodates the prompt resolution of Plaintiffs claims, is warranted here. Defendants are currently and actively soliciting special meeting request forms from at least % of Allergan s stockholders. Once those request forms are submitted to Allergan, and assuming the special meeting requests are validly submitted consistent with Allergan s bylaws, Allergan s Secretary must call that meeting within a reasonable period of time. Smith Decl. Ex. C, Art. II,. However, the board shall not accept any requests solicited or secured in violation of Section A or other applicable law, and shall not call the meeting unless the requests comply with all requirements of applicable law, including all requirements of the Exchange Act. Id. Art. II, (B)(), (). Prompt resolution of Plaintiffs claims is therefore necessary so that Allergan s board will have available as much information as possible in determining whether to call the special meeting. Courts routinely expedite briefing and discovery schedules under Rule where, as here, a declaratory judgment action is proceeding in connection with an O RANGE COUNTY CASE NO. :-CV-0-DOC (ANx)

14 Case :-cv-0-doc-an Document - Filed 0/0/ Page of Page ID #: 0 0 ongoing contest for corporate control, in order to accommodate prompt adjudication of claims and issues critical to the potential transaction. See, e.g., Smith Decl. Ex. G (Order, Express Scripts, No. :-cv-0s0-jar) (granting plaintiffs motion for expedited briefing schedule and speedy hearing); Smith Decl. Ex. H (Order, Apache Corp. v. Chevedden, No. :-cv-00-lhr (S.D. Tex. Feb., 0), ECF No. ) (granting motion for speedy hearing and setting conference to establish expedited schedule two weeks after complaint was filed); Neuberger Berman Real Estate Income Fund, Inc. v. Lola Brown Trust, F. Supp. d, (D. Md. 00) (ruling on declaratory judgment action one month after target company filed complaint). A decision on Defendants alleged violations of the federal securities laws will help the Allergan board reach an appropriate determination on the merits of Defendants special meeting request. Moreover, if this Court declares that Defendants have violated federal law, Defendants will need to revise [their] proposed course of conduct to remedy or preempt [their] legal violations prior to a stockholder vote. Moore Corp. v. Wallace Computer Servs. Inc., F. Supp. 0, 0 (D. Del. ). Declaratory judgment will remove the uncertainty surrounding Defendants disclosure obligations before a stockholder vote, and provide Allergan s board of directors and the market with an informed basis for evaluating the legality and sufficiency of Defendants offer. See, e.g., StreamCast Networks, Inc. v. IBIS LLC, No. CV 0-0 MMM (Ex), 00 WL 0, at * (C.D. Cal. May, 00) (finding declaratory relief appropriate where it would clarify plaintiff s prospective right to terminate the agreement without liability); Sierra Foothills Pub. Util. Dist. v. Clarendon Am. Ins. Co., No. CV-F- 0- REC/LJO, 00 WL 0, at * (E.D. Cal. Aug., 00) (holding that declaratory relief is appropriate to resolve insurer s potentially continuing duty to defend on the appeal or thereafter if a re-trial is ordered ). O RANGE COUNTY 0 CASE NO. :-CV-0-DOC (ANx)

15 Case :-cv-0-doc-an Document - Filed 0/0/ Page of Page ID #:0 0 0 Swift resolution of this matter will also address the ongoing effect of Valeant s announced tender offer on Allergan s share price, which has remained affected for months now since Valeant s plans became public. Every day that it remains outstanding, Valeant s tender offer impacts Allergan s stock price and affects every investor in Allergan shares, as well as those considering the purchase of Allergan shares. Yet, if Defendants conduct violates the insider trading provisions of Rule e-, the tender offer cannot proceed, and any investors who made their investment decisions without knowledge of Valeant s and Pershing Square s conduct will have been substantially injured. B. Expedited Proceedings Are Also Appropriate Under Rule and the Court s Inherent Authority While Rule provides ample basis for expediting the resolution of Plaintiffs claims, Rule and the Court s inherent authority to manage its docket also permit an expedited schedule. See SEC v. Wilde, No. SA CV -0-DOC (AJWx), 0 WL 0, at * (C.D. Cal. May 0, 0) (noting power inherent in every court to manage the schedule of cases on its docket to ensure fair and efficient adjudication[] ) (citing Landis v. N. Am. Co., U.S., ()); see also Fed. R. Civ. P. (a)()(a) (allowing waiver of initial disclosures); Fed. R. Civ. P. (d)() (permitting court to waive requirements of discovery conferences). This discretion includes the power to accelerate discovery. See, e.g., NobelBiz, Inc. v. Wesson, No. -CV-0-W (JLB), 0 WL, at * (S.D. Cal. Apr., 0) (granting limited discovery in advance of answer); Semitool, Inc. v. Tokyo Electron Am., Inc., 0 F.R.D., (N.D. Cal. 00) (granting limited expedited discovery in advance of initial case management conference). Plaintiffs do not through this motion seek to lift the discovery stay mandated by the Private Securities Litigation Reform Act of (the PSLRA ). U.S.C. u-(b)()(b) (0). Rather, Plaintiffs request accelerated adjudication of any O RANGE COUNTY CASE NO. :-CV-0-DOC (ANx)

16 Case :-cv-0-doc-an Document - Filed 0/0/ Page of Page ID #: 0 0 As discussed, expedited proceedings are necessary so that Plaintiffs federal claims can be resolved promptly without unduly delaying the ongoing contest for corporate control, including the timing of a potential special meeting. To facilitate prompt resolution of Plaintiffs claims, Plaintiffs proposed schedule contemplates focused discovery that is narrowly tailored and appropriate to the relief sought. That discovery would include the production of documents related to Defendants relationship, communications among Defendants regarding their plans for the takeover, including discussions regarding the disclosure of Valeant s plans to the Pershing Square Defendants and the various subsequent agreements, their solicitation of other stockholders to join their agreement, their initial accelerated accumulation of shares, and the service of Bob Ingram on Valeant s board during and after his service on Allergan s board. A limited number of depositions on similar topics would likely follow, within the schedule set by the Court. V. CONCLUSION For the foregoing reasons, Plaintiffs respectfully request that the Court grant Plaintiffs application for expedited proceedings and enter a scheduling order adopting the dates and deadlines reflected in Attachment A. Dated: August, 0 O RANGE COUNTY LATHAM & WATKINS LLP By: /s/peter A. Wald Peter A. Wald Michele D. Johnson WACHTELL LIPTON ROSEN & KATZ LLP William D. Savitt (pro hac vice forthcoming) motion to dismiss that Defendants might bring, and an expedited discovery schedule thereafter. Plaintiffs proposed schedule reflects presently anticipated motions and proceedings; depending upon future developments, Plaintiffs may seek additional expedited relief. CASE NO. :-CV-0-DOC (ANx)

17 Case :-cv-0-doc-an Document - Filed 0/0/ Page of Page ID #: 0 0 O RANGE COUNTY Bradley R. Wilson (pro hac vice forthcoming) W. nd Street New York, NY 00 Attorneys for Plaintiffs ALLERGAN, INC. and KARAH H. PARSCHAUER CASE NO. :-CV-0-DOC (ANx)

18 Case :-cv-0-doc-an Document - Filed 0/0/ Page of Page ID #: ATTACHMENT A Schedule Event Defendants Motion to Dismiss, if any; otherwise, Defendants Answer Plaintiffs Opposition to Motion to Dismiss Defendants Reply in Support of Motion to Dismiss Hearing on Defendants Motion to Dismiss Discovery Completed Plaintiffs Motion for Summary Judgment Defendants Opposition to Motion for Summary Judgment Plaintiffs Reply in Support of Motion for Summary Judgment Hearing on Plaintiffs Motion for Summary Judgment Trial Date August, 0 September, 0 September, 0 September, 0 (or as soon thereafter as it may be heard) Submission of Requests plus 0 days Submission of Requests plus 0 days Submission of Requests plus days Submission of Requests plus days Submission of Requests plus 0 days (or as soon thereafter as it may be heard) Submission of Requests plus 0 days Plaintiffs request that any hearing on Defendants motion to dismiss, if any, be set for September, 0, or at the Court s earliest convenience. The Submission of Requests indicates the date on which Defendants submit to the Allergan board of directors facially valid request forms from % or more of Allergan stockholders seeking to call a special meeting.