Cher sues NantHealth's Patrick Soon-Shiong alleging stock sale fraud
Iconic performer Cher is suing biotech mogul Patrick Soon-Shiong, Altor Acquisition, Altor cofounders Hing C. Wong and Fred Middleton and a vice chairman of Altor’s board, for allegedly duping her into selling her shares of the promising drug company at a fraction of its value.
Cher sold her shares of the Florida-based biopharmaceutical company in January 2016 at $1.50 per share, which totaled $450,000. However, the suit alleges this amount was “unreasonably below market price,” according to a report by the L.A. Times.
The lawsuit claims that Cher was not made aware that an Altor drug was showing promise in the treatment of cancer and AIDS/HIV in clinical trials. As a result, the lawsuit claims fraudulent concealing and breach of fiduciary duty.
NantCell -- one of Soon-Shiong’s health IT companies -- bought all outstanding Altor shares in 2016 for around $15 million. The latest lawsuit alleges the company is now worth more than $1 billion.
“The lawsuit has no merit. We intend to vigorously defend against it,” Michael Sitrick, a spokesman for Soon-Shiong, said in a statement.
This is not the first lawsuit over Soon-Shiong’s takeover of Altor.
At the end of June, two Washington, DC, attorneys, Boyden Gray and Adam Waldman, filed suit against Soon-Shiong, alleging the biotech mogul is seeking to acquire Altor Bioscience through a sweetheart deal.
The initial lawsuit alleged that the deal in place to acquire Altor would benefit Soon-Shiong, Wong and Middleton -- all board members of Altor Bioscience. But the deal would come at the expense of the minority shareholders, which breaches their fiduciary duty.
Further, the alleged “insider transaction” would allow NantCell to acquire Altor stock. And claims Soon-Shiong “caused Altor to enter into a definitive agreement and plan of merger” on May 19. In doing so, all outstanding Altor shares would go to NantCell.
The suit was amended in July to include claims that Soon-Shiong low-balled the value of Altor and paid off two directors to buy their vote for the merger -- similar to the claims made in Cher’s lawsuit. By pushing the deal through, Soon-Shiong was able to buy Altor at a significantly lower price.
Soon-Shiong has vehemently denied all accusations -- including the laundry list of claims brought forward by Stat and Politico in the first half of 2016, which called into question his business dealings, potential conflicts of interest, expenditures of his nonprofit business dealings and questionable donations.
Others filed lawsuits after these damning reports.
Despite the controversies, Paul Ryan appointed Soon-Shiong to the U.S. Department of Health and Human Services Health IT Advisory Committee in May. And the biotech mogul recently acquired controlling stake in Verity Health, a health system in California.