From The Story of RU-486 in the United States (2001 third year paper)
By way of background to this controversy, the Population Council had licensed another nonprofit organization, Advances in Health Technology, see supra note 91, to manufacture and distribute RU-486 in the United States.178 Advances in Health Technology subsequently sub-licensed the manufacturing and distribution rights to NeoGen Industries, a corporation controlled by a lawyer and businessman named Joseph Pike. Pike had earlier worked with the Population Council on the development of an intrauterine contraceptive device.179 In an effort to raise money from investors to finance the RU-486 project, Pike established a series of limited partnerships and some other companies that were incorporated in the Cayman Islands.180 One investor, the Giant Group of Beverly Hills, paid $6 million to Pike for a 26% interest in Pike’s companies and allegedly secured as part of the agreement a restrictive covenant that barred Pike from selling a significant portion of his entities to other prospective investors.181 When Pike allegedly violated this agreement by attempting to sell a substantial share of his entities to various other purchasers, the Giant Group filed suit in Los Angeles Superior Court, accusing Pike of fraud, breach of fiduciary duty, fraudulent concealment, breach of contract, and unfair business practices.182 In keeping with RU-486’s fascinating and controversial odyssey was the lawsuit’s further contention that Mr. Pike was a disbarred lawyer who had been convicted of forgery in North Carolina and, as a result, received a suspended two-year sentence and 18 months probation.183
Information about Pike’s alleged notorious dealings and shady past soon ignited a flurry of lawsuits against him that hindered RU-486’s entry into the U.S. consumer market. KCC Delaware, one of the investors in Pike’s entities, sued Pike and accused him of concealing his past and mishandling the investment deal.184
In a separate suit filed on November 4, 1996 in New York State Supreme Court, the Population Council and Advances in Health Technology charged Pike with fraud.185 The lawsuit alleged that Pike had not properly accounted for the money that was invested in his entities and had ciphoned [sic] off money into some dubious off-shore entities.186 While the Population Council and Advances in Health Technology did not seek to rescind the sublicenses Pike had issued to Danco Laboratories and other companies to manufacture and distribute the drug, they did seek to wrest control of the company from him by having his interest in the entities transferred to a court-appointed receiver.187 The Population Council strongly believed that Pike’s past legal troubles and his efforts to conceal them disqualified him from serving as a fiduciary and the lead business entrepreneur in the RU-486 enterprise – a politically sensitive and controversial venture that needed a person of irrefutable integrity at its helm.
After months of legal jostling, the stalemate finally came to an end on February 12, 1997 when the Population Council announced that it had settled the lawsuit surrounding control of RU-486 and had arranged for a new privately held company, Advances for Choice, to handle the drug.188 Under the settlement, Pike agreed to sell most of his equity interest in the RU-486 enterprise, keeping only a modest passive investment, and to relinquish any role in the management of the newly formed company.189 Jack Van Hulst, a Dutch attorney and Population Council consultant, became the president and chief executive of Advances for Choice and forecasted that the drug would be available to doctors and clinics by December 1997.190
178 See Editorial, The Troubles of RU-486, N.Y. Times, Nov. 8, 1996, at A32.
179 See Tamar Lewin, Abortion Pill’s Legal Woe May Be Nearing an End, N.Y. Times, Jan. 25, 1997, at A7.
180 See Gina Kolata, Business Dispute May Delay Introduction of Abortion Pill, N.Y. Times, Nov. 1, 1996, at A20. The Cayman Islands entities were not required to disclose the names of officers and partners. See id.
181 See id.
182 See id.
183 See id.
184 See Sharon Bernstein, Persistence Brought Abortion Pill to U.S.: Two Feminist Activists Culled Nonprofit Organizations and Dedicated Individuals To Do The Work That No Pharmaceutical Company Was Willing to Tackle, L.A Times, Nov. 5, 2000, at A1.
185 See Tamar Lewin, Dispute May Delay Abortion in the U.S., N.Y. Times, Nov. 6, 1996, at A16
186 See id.
187 See Caryle Murphy & Kathleen Day, Abortion Pill’s U.S. Debut Snagged by Business Dispute: Sponsor Seeks to Oust Associate For Not Disclosing Disbarment, Wash. Post., Jan. 12, 1997, at A1.
188 See Tamar Lewin, Legal Bout Over Abortion Pill Ends: Group Will Apply For FDA Approval, L.A. Daily News, Feb. 13, 1997, at N19. The Population Council had previously intended to distribute RU-486 through Advances for Health Technology, which was subsumed into the new company. See FDC Reports, Mifepristone (RU-486) Distribution Given to a New Company Headed by Former Generic Exec Van Hulst, The Pink Sheet, Feb. 17, 1997.
189 American Political Network, Spotlight Story, Story RU-486: Suit Settled; Sales May Begin in ’97, 7 Abortion Rep. No. 137, Feb. 13, 1997, available in WL APN-AB File.
190 See Tamar Lewin, Legal Hurdle Cleared in Sale of French Abortion Pill in U.S., N.Y. Times, Feb. 13, 1997, at A28
The upshot of this (as it came to be of interest here) is that there is a Joseph Pike who was convicted of forgery. “In keeping with RU-486’s fascinating and controversial odyssey was the lawsuit’s further contention that Mr. Pike was a disbarred lawyer who had been convicted of forgery in North Carolina and, as a result, received a suspended two-year sentence and 18 months probation.”
Pike was sued with regard to the RU-486 affair, but that was settled, apparently satisfactorily. The issue about disbarment was raised by the plaintiff in that lawsuit. The source is the New York Times article by Gina Kolata, November 1, 1996, who has:
The lawsuit contended that Mr. Pike had misrepresented himself to the Giant Group. According to the lawsuit, Mr. Pike is a disbarred lawyer who was convicted of forgery in May in North Carolina and is on probation after receiving a two-year suspended prison sentence.
Mr. Christensen’s public relations firm provided copies of Mr. Pike’s affidavit before the North Carolina State Bar, which took away his license to practice law in 1993, and legal documents describing his suspended sentence for forgery.
This is weak confirmation. However, the disbarment action is available, July 9, 1993, and it includes an affidavit signed by Joseph Daniel Pike, acknowledging the actions that led to his disbarment.
Another NY Times article, by Tamar Lewin, November 6, 1996, has a little more detail:
Margaret Catley-Carlson, the president of the Population Council, said her group told Mr. Pike in late July to divest, after learning that he had been disbarred for forgery in a 1985 North Carolina real estate deal and had been given a suspended two-year sentence. Ms. Catley-Carlson said she had long known Mr. Pike as a backer of products shunned by pharmaceutical companies, like the Copper-T intrauterine device.
So the alleged fraud was over thirty years ago as this is written. A decade later, he was given a suspended sentence, which is likely an indication that the offense was not major, but it would still be, likely, a felony, and would surely lead to disbarment for a lawyer. He did not serve time in prison. In the RU-486 affair, while he was accused of fraud there, it appears that it was all settled, there were no criminal charges.
Next issue: the name is common. Is this the Joseph Pike who is a principal of JPIH Holdings, which holds significant investment in IH Holdings International? (Perhaps 6 million shares, par value about $60,000.)
The North Carolina J. Daniel Pike was obviously a businessman dealing with major funding. That could be significant. He signed the articles of association of IHHI, (see pdf page 6). The signature is close enough to that of the North Carolina J. Daniel Pike that I conclude this is the same person.
On the face, JPIH Holdings was formed to be Joseph Pike IH Holdings. JPIH Holdings LLC (Florida) has Pike as manager and registered agent, with a Florida address. JPIH Holdings likely represents his personal investment. It is a Delaware corporation, formed 5/24/2013. From the date, Pike was an early investor in Industrial Heat.
And this is meaningless. Pike’s history could be of concern to someone placing great reliance on him, and the RU-486 affair was largely about his being heavily trusted but not having disclosed his (then recent) past. As an investor, that would not be relevant.