LV medical firm tries blocking stock sale

Tuesday, Sept. 1, 1998 | 11:06 a.m.

A Las Vegas medical device company is telling its former chief executive he can't sell stock as he had planned.

INAMED Corp. said Monday it would not permit former chief executive Donald McGhan to sell 50,000 shares.

McGhan filed a document with the Securities and Exchange Commission on Friday stating his intent to sell his shares. But because McGhan signed a standstill agreement forbidding a sale of shares without permission from INAMED's board of directors in July, the deal was blocked.

INAMED said McGhan was planning the sale at the request of margin lenders who asked him to sell the shares. McGhan had received the stock in exchange for a $10.8 million cash loan to the company.

McGhan did not return telephone calls on Monday.

A company statement said it has instructed its transfer agent "to place a 'stop transfer' notation on all of the shares of common stock beneficially owned by Mr. McGhan and his affiliates, including those shares which may be held in street name or margin accounts.

"During this time of turmoil in the financial markets, it is important for investors to assess the value of a company's securities based on its fundamentals rather than supposition and rumors," INAMED's statement said. "Unfortunately, the Form 144 (stock sale) filing ... may give rise to unfounded beliefs as to the ability and plans of Mr. McGhan's margin lenders to sell some of his shares of common stock. No such action can occur without the consent of the company's board of directors. No such approval has been given, nor is any forthcoming."

INAMED made news earlier this year when it agreed to pay $31.5 million to settle all claims arising from breast implants the company manufactured.

Then in July, INAMED announced a restructuring of the company to build profitability under a new chief executive, Richard Babbitt.

For the first quarter of 1998, sales of $30 million were up 13.6 percent from the year-ago quarter. The net loss of $1.3 million, or 14 cents per share, compared to a year-ago quarter loss of $277,000 or 3 cents.