TGA settles Pan court case
November 24, 2010
THE Pan Pharmaceuticals class
action against the Commonwealth
of Australia has reached a
conditional settlement, according to
a stock market update from IMF
Australia, the company which was
funding the court case.
The terms of the settlement are
confidential to the parties, and the
deal is also conditional on Court
approval of the agreement.
“If Court approval is obtained it is
currently estimated IMF will receive
about $24 million, which will
generate a profit after capitalised
overheads but before tax of about
$17 million,” the company said.
A number of reports today have
estimated that based on common
litigation funding practice in which
a firm such as IMF would receive a
third of the proceeds, the total
settlement must be around $50m.
The class action was instigated by
around 165 customers and
creditors of Pan who claimed to
have lost millions when the
company collapsed in 2003.
The failure was precipitated by
Therapeutic Goods Administration
action which suspended Pan’s
manufacturing licence and recalled
all of its products after a series of
adverse reactions to its Travacalm
travel sickness tablets.
Pan founder Jim Selim, who died
earlier this year, already received a
settlement of $55 million and was
acquited of any criminal charges in
relation to the collapse.
The class action claimed that
there was no “rational foundation”
for a TGA warning that any Pan
product manufactured in 2002 was
unsafe to consume, and could
cause illness or even death.
The case was launched in 2008
after the Selim payout.
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