McKesson Awarded $40.5 Million for Dairy Seized by Iran

McKesson Corp. (MCK), the biggest drug distributor in the U.S., was awarded $40.5 million from Iran for the nation’s seizure of a dairy business after a U.S. appeals court ordered reassessment of the original amount.

U.S. District Judge Richard Leon in Washington ruled today that San Fransisco-based McKesson is entitled to $7.6 million in damages, $21.7 million in simple interest, $10 million in attorney fees and $1.2 million in other expenses.

An appeals court in 2012 threw out Leon’s original award of $44 million in the decades-old dispute because it included compound interest as part of the compensation for Iran’s seizure of the dairy during the country’s 1979 revolution. The court found that under Iranian law compound interest wasn’t an available remedy.

“After almost thirty years, the end of this ‘Sisyphean labor’ is finally in sight,” Leon wrote in his ruling today.

Charles Kimmett, an attorney for Iran, didn’t immediately respond to a phone message requesting comment on the ruling.

Mark Bravin, an attorney for McKesson, declined to comment on it.

Leon ruled in 2010 that Iran violated its own laws and international laws when it took control of Pak Dairy Co. and withheld dividends from McKesson.

The parties have been fighting since at least 1982 over the dairy, which, according to court records, was created in 1960 by McKesson and a group of Iranian investors. The case has been the subject of several appeals over jurisdiction.

The case is McKesson Corp. v. Islamic Republic of Iran, 82- cv-00220, U.S. District Court, District of Columbia (Washington).

To contact the reporter on this story: Andrew Zajac in Washington at azajac@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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