US court finds enough evidence to proceed with Grifols lawsuit against Gotham City

Grifols SA

30/05/2025 08:09

MADRID, May 30 (Reuters) - A New York court found enough evidence to continue with the defamation lawsuit filed by Spanish pharmaceutical company Grifols GRLS.MC against short seller Gotham City Research, Grifols said in a statement on Friday.

Based on its findings, the Federal District Court for the Southern District of New York rejected a request filed by Gotham City to dismiss the lawsuit, Grifols said.

In January 2024, Gotham, which had previously shorted Grifols shares, released a report accusing the company of overstating earnings and understating debt. Grifols denied the allegations but lost around a third of its market value following the report.

Shorting involves borrowing shares in order to sell them, with the hope of buying them back more cheaply to make a profit.

According to Grifols, the court also found that Grifols adequately argued that Gotham City's report contained false statements, such as that the company had failed to disclose a $95 million loan to Scranton Enterprises.

Gotham City did not immediately respond to a request for comment.

 (Reporting by Javi West Larrañaga. Editing by Inti Landauro and Mark Potter)

 ((Javier.West@thomsonreuters.com; +48 58 769 65 76;))