Melnyk wants court to compel Biovail to hold new annual general meeting

By Lisa Kerner

Charlotte, N.C., July 2 - Biovail Corp. founder and shareholder Eugene Melnyk is seeking an order from the Ontario Superior Court directing Biovail to fix a record date for a new annual general meeting.

Melnyk will ask the court to also order that Biovail provide advance notice of the record date for the meeting and that the company hold the meeting, it was reported in a schedule 13D filed with the Securities and Exchange Commission.

In the filing, Melnyk alleges that Biovail's board met behind closed doors to amend the company's bylaws to reduce the quorum for a meeting after proxies representing 6 million Biovail shares were revoked prior to the June 25 annual meeting.

As a result of the revocation, a quorum of at least 51% of the issued and outstanding shares of common stock would not have been present at the meeting as required under Biovail's bylaws, prior to the amendment.

Melnyk maintains that the purported amendment did not have the effect of reducing the quorum required for the annual meeting.

Following the annual meeting, Biovail announced that its slate of director nominees received support from over 97% of the 56.7 million shares that were voted.

Biovail, a Toronto biopharmaceutical company, said the revocation of the shares was a correction of a clerical error related to an overvote situation by a financial institution, it was previously reported.

Melnyk, as part of the Concerned Shareholders of Biovail group, had sought the election of a dissident slate of 10 nominees for election to the Biovail board, including former Biovail chief executive officer Bruce D. Brydon.

Brydon and Melnyk previously announced they were postponing the formation of their new pharmaceutical company, Trimel Pharmaceutical Inc., in favor of implementing the plan outlined by the shareholder group in its proxy circular.

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