A new shareholder derivative suit was filed on 9/27 (Case 1:18-cv-04514-ELR). The shareholder had sent a demand letter to the Board earlier in the year urging them to conduct an investigation into the internal investigation into the audit committee and other matters including:
(i) the circumstances surrounding the indictment of the three VA employees on charges they accepted bribes from MiMedx; (ii) the circumstances surrounding the Company’s need to restate more than five years of financial statements; (iii) the sudden departures of defendants Senken and Cranston; (iv) the independence of the Company’s Audit Committee members conducting the investigation into MiMedx’s sales and distribution practices; and (v) the improper corporate culture the Company’s fiduciaries promoted or allowed to continue for a number of years.
The shareholder says that:
Nearly three months after plaintiff sent his initial Demand, the Board finally responded. In a letter dated July 2, 2018, Edmund Polubinski III (“Polubinski”) from the law firm of Davis Polk & Wardwell LLP, stated that the Board had created the Special Committee to investigate plaintiff’s Demand, and that his firm was retained to assist the Special Committee. The letter explained that the Special Committee was unable to provide an estimate of when the investigation would be complete, as it had yet to begin its investigation.
The suit attached a letter from Davis Polk (below) in July —confirming that they have begun an investigation that states “I invite you to provide any additional information that you have concerning purported breaches of fiduciary duty or other allegedly improper conduct by the Company’s directors or Officers”(below). Therefore, I believe this is clearly a 3rd internal investigation into matters including conduct of the Audit committee.
This is the attorney who wrote the letter:
Edmund Polubinski III
1. New York
+1 212 450 4695
Mr. Polubinski is a partner in Davis Polk’s Litigation Department, representing clients in securities, derivative, acquisition-related, and other complex litigation in federal and state trial and appellate courts around the country, as well as in arbitration. He also represents companies, funds, and boards of directors in internal investigations, as well as in investigations and other proceedings before various governmental authorities, including the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Department of Justice. His recent clients include Citigroup, Crestview Partners, Cross River Bank, FINRA, Hitachi, Morgan Stanley, Pattern Energy, Prosensa, Roche, Tailwind Partners, Toll Brothers and the independent directors of MF Global.
Mr. Polubinski has been recognized for his work in securities litigation in leading industry publications. In Chambers USA, sources have described him as “terrific,” “superb,” “very conscientious and extremely smart,” and highlight his “excellent judgment.” He has also been recognized in Benchmark Litigation and The Legal 500 U.S.