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Mark Holscher (SBN 139582)
mark.holscher@kirkland.com
Michael Shipley (SBN 233674)
michael.shipley@kirkland.com
KIRKLAND & ELLIS LLP
333 South Hope Street
Los Angeles, California 90071
Telephone: (213) 680-8400
Facsimile: (213) 680-8500

Attorneys for Defendants Pershing
Square Capital Management, L.P.; PS
Management GP, LLC; PS Fund 1,
LLC; and William Ackman

[Additional counsel on signature page]

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
SOUTHERN DIVISION SANTA ANA

ALLERGAN, INC., et al.,

Plaintiffs,

v.

VALEANT PHARMACEUTICALS,
INTERNATIONAL, INC. et al.,
Defendants.
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Case No.: 8:14-cv-01214-DOC-(ANx)

Honorable David O. Carter
NOTICE OF MOTION AND
MOTION FOR LEAVE TO FILE
AMENDED COUNTERCLAIMS;
MEMORANDUM OF POINTS AND
AUTHORITIES


Hearing Date: November 17, 2014
Time: 8:30 a.m.
Courtroom: 9D
Case 8:14-cv-01214-DOC-AN Document 190 Filed 10/20/14 Page 1 of 9 Page ID #:6923
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TO ALL PARTIES AND THEIR COUNSEL OF RECORD:
PLEASE TAKE NOTICE THAT on November 17, 2014 at 8:30 a.m., or as
soon thereafter as the matter can be heard by the above-entitled Court, located at 411
W. Fourth Street, No. 1053, Santa Ana, California 92701, Defendants Pershing Square
Capital Management, L.P.; PS Management, GP, LLC; PS Fund 1, LLC; William A.
Ackman; Valeant Pharmaceuticals International, Inc.; Valeant Pharmaceuticals
International; and AGMS, Inc. (collectively, Defendants) will and hereby do move
the Court pursuant to Federal Rule of Civil Procedure 15 for leave to file Amended
Counterclaims of Valeant and Pershing Square (Amended Counterclaims). This
motion is based on the Notice of Motion and Motion, the attached Memorandum of
Points and Authorities, the pleadings, and the concurrently filed proposed Amended
Counterclaims of Valeant and Pershing Square. See L.R. 15-1.
This motion is made following the conference of counsel pursuant to Local
Rule 7-3, which occurred on September 26, 2014. Plaintiffs do not consent to the
relief sought herein.
Case 8:14-cv-01214-DOC-AN Document 190 Filed 10/20/14 Page 2 of 9 Page ID #:6924
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-1-

MEMORANDUM OF POINTS AND AUTHORITIES
Recently produced discovery regarding Plaintiffs Motion for a Preliminary
Injunction has revealed the need for Defendants to amend their counterclaims to add
additional claims.
1
Although entrenched directors and managers frequently fight hard
to preserve their jobs when challenged by shareholders seeking change, Allergans
management has crossed the line by taking specific actions to reduce the price of
Valeants stock (while propping up Allergans stock price) through misleading
statements. Allergans CEO and Chairman of the Board David Pyott personally led
the charge and directed much of the misconduct. Allergan:
Provided false and misleading information about Valeant to investors,
with Mr. Pyott personally overriding a recommendation that the
campaign went too far from another member of management;
Intentionally failed to timely disclose Allergans CFO, Jeff Edwardss
notice of resignation, and then misled shareholders about the delay at the
direction of Mr. Pyott;
Disregarded input from its outside advisors, falsely stating to the market
and Valeants top investors that Valeants accounting was opaque and
problematic. Tellingly, after baselessly trashing Valeants accounting for
months and continuing to do so in its recently filed preliminary proxy
statement, Allergan chose not to expose its alleged accounting expert to
cross-examination in this litigation, instead withdrawing his report on the
eve of his scheduled deposition;
Attacked Valeants business and stock price despite having no basis to do
so given the information Allergan did have from its advisors;
Attributed drops in Valeants stock price to their baseless attacks; and

1
On September 11 and 12, 2014, Allergan produced over 4,200 pages of material it
had previously withheld or overlooked. These documents included numerous
communications between Allergans executives concerning Valeants business model.
Five Allergan executives and board members, including its current CEO, CFO, and
lead independent director, were deposed from October 7 through October 20, 2014.
Case 8:14-cv-01214-DOC-AN Document 190 Filed 10/20/14 Page 3 of 9 Page ID #:6925
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-2-

Withheld from the Board the extent of the smear campaign waged by
Allergan management.
In short, Allergan has clearly made a central part of its defense strategy
attempting to devalue the currency that Valeant is offering to Allergans shareholders
and has repeatedly congratulated itself on the success of its strategy. Defendants
believe Allergans failure to disclose this strategy and the misleading arguments it has
used to implement it are violations of the securities laws for the reasons set out more
fully in the attached proposed Amended Counterclaims. These misstatements and
omissions, reflected in the documents Allergan belatedly produced in discovery, give
rise to these new Counterclaims.
In addition, after Allergan specifically agreed that it would take no action to
delay, postpone, or not hold [a] Special Meeting [of its shareholders] on December 18,
2014 or seek to invalidate any [Special Meeting] Requests, (see PS Fund 1, LLC, et
al. v. Allergan, Inc., et al., C.A. No. 10057-CB (Del. Ch. 2014), Dkt. No. 95),
Allergan declared that the parties agreement underscore[d] the Allergan Board of
Directors long-standing commitment to providing stockholders with a forum to
express their opinion on the value proposition offered by Valeant.
2
But behind the
scenes, press reports have indicated that Allergan was in undisclosed negotiations to
enter into transactions with at least two companies, Salix Pharmaceuticals and Actavis
Plc, which if consummated would effectively deprive shareholders of the opportunity
to express their opinion on the value proposition offered by Valeant.
THE PLEADINGS
Allergan filed its lawsuit on August 1, 2014, asserting violations of various
sections of the Securities Exchange Act of 1934 (Exchange Act) and its regulations.
Dkt. No. 1. Defendants answered (Dkt. No. 39) and filed counterclaims (Dkt. No. 42)

2
September 16, 2014 Allergan Schedule 14A, available at
http://www.sec.gov/Archives/edgar/data/850693/000119312514343070/d790370ddef
a14a.htm.
Case 8:14-cv-01214-DOC-AN Document 190 Filed 10/20/14 Page 4 of 9 Page ID #:6926
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-3-

on August 19. Defendants counterclaims asserted four counts under the Exchange
Act:
Counts (I)-(III) Violations of Section 14(a), 14(e), and 20(a) for
misrepresentations about Valeants business model, Bausch & Lomb,
the consideration of the Exchange Offer, and Defendants conduct;
Count (IV) Violation of Section 14(a) and Rule 14a-3 for
improperly meeting with Valeant shareholders while Valeants proxy
solicitation was ongoing.
Dkt. No. 42 at 64-89. The proposed Amended Counterclaims encompass five
counts: (i) a section 14(a) violation based on Allergans false and misleading
statements and omissions to shareholders; (ii)-(iii) section 14(e) and 20(a) claims
based on the same statements/omissions; (iv) a Rule 14a-3 claim based on Allergans
improper solicitation of Valeant shareholders; and (v) a Rule 14d-9 claim based on
Allergans failure to disclose third-party negotiations to enter into a defensive
transaction.
ARGUMENT
I. Leave to Amend Should Be Granted.
Rule 15(a) is very liberal and leave to amend shall be freely given when
justice so requires. AmerisourceBergen Corp. v. Dialysist W., Inc., 465 F.3d 946,
952 (9th Cir. 2006) (quoting Fed. R. Civ. P. 15); see also DCD Programs, Ltd. v.
Leighton, 833 F.2d 183, 186 (9th Cir. 1987) (Rule 15 policy of favoring amendments
to pleadings should be applied with extreme liberality.). The Court should deny
leave only when it (1) prejudices the opposing party; (2) is sought in bad faith; (3)
produces an undue delay in litigation; or (4) is futile. AmerisourceBergen, 465 F.3d
at 952. Allergan has not indicated that it opposes amendment, nor is there any basis to
do so.
Amending the counterclaims will not prejudice Allergan. In the two months
since Defendants filed their counterclaims (Dkt. No. 42), there has been no conference
under Rule 26(f), and no scheduling order has been set by the Court with respect to
Case 8:14-cv-01214-DOC-AN Document 190 Filed 10/20/14 Page 5 of 9 Page ID #:6927
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-4-

the counterclaims. The only discovery taken by the parties, and the only scheduling
order entered by the Court, concerns Allergans Motion for a Preliminary Injunction
regarding its claims. See Dkt. No. 87 (Joint Stipulation and Proposed Order Re
Scheduling). Defendants are amending their counterclaims to reflect recently-
discovered information. No unreasonable delay will be caused by the amendment.
Nor is amendment futile. Each new counterclaim presents a legitimate theory of relief
based on the facts alleged.
II. The Amended Counterclaim Should Be Accepted For Filing As Is.
The need and basis for amendment arose from materials and testimony obtained
in discovery, the vast majority of which Allergan has designated Confidential or
Highly Confidential under the Stipulated Confidentiality Order. In accordance with
that Order, Defendants are filing the proposed Amended Counterclaims under seal
under an abundance of caution. However, the documents referenced in the proposed
Amended Counterclaims do not reveal any proprietary information about Allergan
rather, they relate to Allergans criticisms of Valeantand therefore do not meet the
standard for obtaining confidential treatment under Federal Rule of Civil Procedure
26(c), let alone sealing a portion of an operative pleading. Moreover, there is a
fundamental unfairness to Allergan taking a very public position devaluing Valeants
stock and at the same time using the confidentiality order to shroud in secrecy its
behind the scenes machinations that accompanied its public statements. Therefore,
Defendants respectfully request relief from the Confidentiality Order to the extent
required to file publicly the Amended Counterclaims.
* * *
Accordingly, Defendants respectfully request that their motion for leave to file
Amended Counterclaims be granted.
Case 8:14-cv-01214-DOC-AN Document 190 Filed 10/20/14 Page 6 of 9 Page ID #:6928
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-5-

Dated: October 20, 2014 Respectfully submitted,

KIRKLAND & ELLIS LLP

By: /s/ Mark Holscher

Mark Holscher (SBN 139582)
Michael Shipley (SBN 233674)
KIRKLAND & ELLIS LLP
333 South Hope Street
Los Angeles, California 90071
Telephone: (213) 680-8400
Facsimile: (213) 680-8500
Email: mark.holscher@kirkland.com
michael.shipley@kirkland.com

Jay P. Lefkowitz (pro hac vice)
John P. Del Monaco (pro hac vice)
Danielle Sassoon (pro hac vice)
KIRKLAND & ELLIS LLP
601 Lexington Avenue
New York, New York 10022-4611
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
Email: lefkowitz@kirkland.com
jdelmonaco@kirkland.com
dsassoon@kirkland.com

Attorneys for Pershing Square Capital
Management, L.P.; PS Management, GP; LLC,
PS Fund 1, LLC; and William A. Ackman

Case 8:14-cv-01214-DOC-AN Document 190 Filed 10/20/14 Page 7 of 9 Page ID #:6929
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-6-

Dated: October 20, 2014 SULLIVAN & CROMWELL LLP

By: /s/ Brian T. Frawley

Robert A. Sacks (SBN 150146)
sacksr@sullcrom.com
Edward E. Johnson (SBN 241065)
johnsonee@sullcrom.com
SULLIVAN & CROMWELL LLP
1888 Century Park East, Suite 2100
Los Angeles, California 90067-1725
Telephone: (310) 712-6600
Facsimile: (310) 712-8800

Brian T. Frawley (pro hac vice filed)
frawleyb@sullcrom.com
SULLIVAN & CROMWELL LLP
125 Broad Street
New York, New York 10004-2498
Telephone: (212) 558-4000
Facsimile: (212) 558-3588

Attorneys for Defendants Valeant
Pharmaceuticals International, Inc., Valeant
Pharmaceuticals International and AGMS, Inc.
















Case 8:14-cv-01214-DOC-AN Document 190 Filed 10/20/14 Page 8 of 9 Page ID #:6930
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-7-

SIGNATURE CERTIFICATION
Pursuant to L.R. 5-4.3.4(a)(2)(i), I hereby attest that all the other signatories
listed, and on whose behalf the filing is submitted, concur in the filings content and
have authorized this filing.
Dated: October 20, 2014 KIRKLAND & ELLIS LLP

By: /s/ Mark Holscher
Mark Holscher

Attorneys for Pershing Square Capital
Management, L.P., PS Management, GP, LLC,
PS Fund 1, LLC, and William A. Ackman

Case 8:14-cv-01214-DOC-AN Document 190 Filed 10/20/14 Page 9 of 9 Page ID #:6931