“These politically and financially motivated actions will have a detrimental impact on public health for our consumers in this state,” a Kevnue spokesperson said in a statement. “We will do everything in our power to stand up for sound, credible evidence.”
Texas Attorney General Ken Paxton has asked a judge to prohibit the manufacturer of Tylenol from distributing $400 million in dividends to its shareholders.
According to The Texas Tribune, Paxton’s office acknowledged that this constitutes an “extraordinary request.” It comes a month after Texas announced its lawsuit against Kevnue, the company that now makes Tylenol, and accuses it of failing to warn customers about the risk of having a child with autism if they took medication containing acetaminophen while pregnant.
“I will not allow Big Pharma to ruin the lives of Texans with their lies and then refuse to pay the bill when it’s brought to account,” Paxton said in a statement.
Kenvue, along with most medical experts, contest the basis of Paxton’s allegations, saying there is no serious evidence suggesting a link between Tylenol use and autism spectrum diagnoses.
Nevertheless, Paxton explained his request to the court, saying that the company may need the $400 due to dividends if the lawsuit ends on the state’s terms.
James Spindler, a professor of corporate law at the University of Texas at Austin, told the Texas Tribune that it’s too early to say how the case will play out.
“Presumably, there hasn’t been a huge amount of evidence marshalled about this, so it would be relatively difficult to spitball whether the plaintiff is likely to win,” Spindler said “It would also be relatively difficult to spitball whether the company is going to be insolvent if it makes its payment.”
Spindler noted that, if Paxton’s request is approved, its impact on Kevnue would be immediate and profound.
“This would put a lot of pain on the company in the short term,” Spindler said. “The only reason reason to own [stock in a] corporation is because it pays dividends, and if it can’t pay dividends, no one would ever want to buy it.”
Kenvue, for its part, said that it is taking immediate legal action to stop the state of Texas from “continuing to drive these reckless and scientifically unsound theories” about acetaminophen and autism.
“These politically and financially motivated actions will have a detrimental impact on public health for our consumers in this state,” a Kevnue spokesperson said in a statement. “We will do everything in our power to stand up for sound, credible evidence.”
Sources
Paxton makes “extraordinary request” to block Tylenol maker from paying shareholders
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