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Biofrontera files case against private equity firm for unsolicited stake bid

Biofrontera AG filed a lawsuit against private equity investor Deutsche Balaton AG, alleging the company violated federal and state laws with its unsolicited offer for additional shareholding in the company.

Biofrontera submitted its complaint to the U.S. District Court for the Southern District of New York, naming as defendants Deutsche Balaton and its supervisory chairman, Wilhelm Konrad Thomas Zours, as well as Delphi Unternehmensberatung AG, VV Beteiligungen AG, ABC Beteiligungen AG and Deutsche Balaton Biotech AG.

The German biopharmaceutical company, which develops dermatological products, had advised shareholders to reject Deutsche Balaton's voluntary public offer to acquire an additional 14% stake in the company through its subsidiary Deutsche Balaton Biotech.

Biofrontera alleged that the defendants violated rules on market manipulation, engaged in an unlawful public offering of securities, engaged in deceptive and manipulative acts and practices, engaged in libel and trade libel against the company, tortuously and intentionally interfered with the company's IPO of American depositary shares, and failed to file a beneficial ownership report with the U.S. Securities Exchange Commission.

Additionally, Biofrontera alleged that Axxion SA colluded with the other defendants in the case to form a group to acquire company shares to influence control, without filing the necessary regulatory documents.

Deutsche Balaton and the other defendants together are major shareholders of the company.

"These acts are part of a long, concerted and malicious campaign by the Balaton defendants to embarrass, discredit, distract and injure the company and its employees, officers, directors and other stakeholders and to control the company but without acquiring a controlling stake in the company's shares," Biofrontera said in an SEC filing.

Biofrontera is seeking, among other remedies, damages — both compensatory and punitive — for injuries suffered as a result of Deutsche Balaton's and Zours's libel, trade libel and wrongful interference; and an injunction barring the defendants from buying any additional shares.