A Picture of Valeant Pharmacuticals

“I love scandals about other people, but scandals about myself do not interest me.
The have not got the charm of novelty.” — Dorian Gray


Valeant held an investor call Monday to discuss its relationship with the specialty pharmacy Philidor. During the call Valeant executives asserted that Philidor was not material to Valeant’s business for reporting purposes, which is why previous disclosures contained no explicit reference to the pharmacy.[1]  This conclusion appears to be based, at least partially, on GAAP accounting  standards.[2] The Law, however, is not beholden to the whims of accountants. Therefore, I must write.  Read More

Redux Before Valeant Investor Call

Valeant Pharmaceuticals is in the news for an opaque ownership structure of specialty pharmacies.

The shorts are in. Reports have been published. One report, by Andrew Left, an activist short seller who leads Citron Research is sensationally titled: Valeant: Could this be the Pharmaceutical Enron? A second (long) blog post by John Hempton, the CIO of an Australian fund manager, Bronte Capital, provides a more compete analysis. A third, well-written post by Roddy Boyd of the Southern Investigative Reporting Foundation questions whether a company is circumventing California’s pharmacy regulatory regime. In sum, it’s worrying and Valeant will have to explain its business in the morning. Read More

The Isle of Sham, Trust or GAAR?

“All of this paragraph is extra super not legal advice”[1]

Matt Levine

A wealthy Victoria family, the Coopers, is in the news for not paying tax on gifts from an offshore company. The Coopers gave a company, Ogral, more than $25 million, then circuitously enjoyed its largesse as Ogral made payments that the Coopers and their advisors characterize as “gifts.” The CRA disagrees on this characterization, so there is a dispute. Tax is an area of law where the proper “mystical series of incantations” is crucially important, and perhaps the Coopers’ lawyers’ incantations have ensured that these payments are, at law, gifts. The CRA is asking that the Court recharacterize $5,843,693 in gifts as income, and levy penalties in the amount of $8,420,366 against the Coopers.[2] The CRA’s primary argument is that the Coopers’ “Offshore Company Structure” is a “sham;” but there are other arguments the CRA might consider: perhaps a trust exists between the Coopers and Ogral, acting as trustee, or perhaps the GAAR applies. Read More

Hello, world

“The present reeks of mediocrity and the atom bomb.

— Rene Magritte

This blog is intended to be a corner of the internet where a pseudonymous law and finance geek comments on things for your reading pleasure. I may occasionally indulge the reader of my broader travels, should their documentation enlighten us on the the nature of man.