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Ottawa Senators owner Eugene Melnyk files notice that he's suing Acerus Pharma

TORONTO – The owner of the Ottawa Senators has begun legal proceedings against a drug company that he alleges has been mismanaged to the detriment of shareholders, including himself.

A notice of action was filed in Toronto against Acerus Pharmaceuticals Corp. of Mississauga, Ont., by Eugene Melnyk, who had been head of one of Canada’s largest drug companies before he bought the NHL team.

He’s seeking $145 million alleging breach of fiduciary duty, plus other monetary and non-monetary compensation.

The allegations have not been proven in court.

The company (TSX:ASP) says in an emailed statement that it considers the allegations to be “without any factual or legal foundation” and hadn’t yet received a formal statement of claim against the company or the co-defendants.

Melnyk’s notice of action was filed March 4 at the Ontario Superior Court of Justice and he issued a news release Wednesday saying a full claim will be filed within 30 days.

Public records show that as of Jan. 6, Melnyk owned about 29.3 million shares of Acerus or about 14.6 per cent of the total — making him its third-largest stockholder at the time after First Generation Capital and West Face Capital.

Acerus shares were trading near their lowest levels in at least a year on Wednesday.

Besides the company, the other named defendants are its president and CEO, Tom Rossi, and the chairman of its board of directors, Ihor (Ian) Ihnatowycz.

According to Acerus’s website, it has been focused in recent years on products to treat men and women with sexual dysfunctions.

In Canada, it markets Natesto — a nasal gel for delivering testosterone to men — and it’s working on a nasal gel for women.