The Delaware Supreme Court has upheld the dismissal of a derivative suit targeting the board of AbbVie Inc. over an aborted buyout of Shire, which ended up costing the Chicago-based drugmaker more than $1.6 billion.

A three-judge panel of the high court Monday upheld, by order, a Chancery Court decision from July that dismissed the suit on demand futility grounds, finding that the directors did not face a substantial risk of liability for their role in scuttling the $55 million deal. The two-sentence order, signed by Justice Karen L. Valihura, affirmed on the basis of the Chancery Court's July 10 ruling and did not detail any independent reasoning from the Supreme Court.

AbbVie investor Kyle Ellis and his Bottini & Bottini attorneys filed the derivative lawsuit in May 2017, accusing the board of releasing false and misleading statements regarding the merger.

Ellis claimed that AbbVie had pushed the deal with its Irish rival as a part of a corporate inversion strategy to significantly cut its tax rate by changing the company's country of residence. However, amid changing guidance from the U.S. Treasury Department, the directors publicly downplayed the importance of the merger's tax benefits, despite those concerns being the primary rationale behind the transaction, Ellis said.

Though legislation eliminating the tax benefits of inversions had been introduced at the time, the general consensus dictated that a gridlocked Congress would fail to enact the proposals, and after monitoring the political developments, AbbVie's directors decided the potential benefits of merging with Shire outweighed the risks.

However, AbbVie withdrew from the deal after the treasury department announced in September 2014 that it planned to unilaterally enact its regulations, triggering the payment of a $1.65 million breakup fee to Shire.

In July, Vice Chancellor Sam Glasscock III dismissed the suit with prejudice. In a 34-page memorandum opinion, Glasscock found that none of the statements cited in the lawsuit were false or misleading and that Ellis had failed to show that the defendants had any involvement in authorizing or ratifying them.

AbbVie's charter also contained a clause exculpating the directors from liability for breaching their duty of care, and there was no evidence, Glasscock said, to support claims that they had acted in bad faith.

“In light of the exculpation clause, it is not enough to allege that the misleading statements occurred on these directors' watch; nor is it enough to plead facts from which I may infer negligence, or even gross negligence, in the directors' failure to cure the misimpression caused by the statements,” Glasscock wrote.

Ellis' attorney, Francis A. Bottini Jr., said he was “disappointed” that Glasscock's decision wasn't reversed on appeal, saying “it was an egregious situation” that led his client to file his complaint. Bottini pointed to a federal class action in Illinois, as well as various cases filed in state court, where similar fraud claims against AbbVie and its directors were allowed to proceed.

“We think this was the wrong decision, but that's the way it goes,” said Bottini, a partner at Bottini & Bottini in La Jolla, California.

“It's another example of Delaware protecting the officers and directors, and screwing the shareholders,” he said.

An attorney for AbbVie's directors did not immediately respond Tuesday to a call seeking comment on the case.

Ellis was represented by Bottini and Albert Y. Chang of Bottini & Bottini. Blake A. Bennett, a director at Cooch and Taylor Attorneys at Law, acted as Delaware counsel.

The directors were represented by Robert J. Kopecky and Joshua Z. Rabinovitz of Kirkland & Ellis in Chicago and Lisa A. Schmidt and Daniel E. Kaprow of Richards, Layton & Finger in Wilmington.

The case was captioned Ellis v. Gonzalez.