A Michigan federal judge Wednesday selected a group of pension funds to serve as a lead plaintiff for Neogen investors alleging the company hid postmerger financial difficulties following a combination with a division of manufacturing giant 3M.

U.S. District Judge Hala Y. Jarbou said in an order the seven pension funds appointed as lead plaintiff collectively have a larger financial stake in the litigation than the other lead plaintiff candidate, the IAM National Pension Fund.

She also named Saxena White PA and Grant & Eisenhofer PA lead counsel for the plaintiffs at the pension funds' request.

Together, the seven funds — Operating Engineers Construction Industry and Miscellaneous Pension Fund, City of Miami Fire Fighters' & Police Officers' Retirement Trust, Metropolitan Employee Benefit System, City of Orlando Firefighters' Pension Fund, City of Orlando Police Officers' Pension Fund, City of Orlando General Employees' Pension Fund and West Palm Beach Firefighters' Pension Fund — have asserted $3.7 million in losses, surpassing IAM's $1.7 million loss claim, according to the decision.

IAM, which had also sought to be appointed lead plaintiff, said it experienced the largest individual investor loss and argued the seven funds could not aggregate their losses to win lead plaintiff status.

The judge that found nothing in the Private Securities Litigation Reform Act prevents a group of plaintiffs from combining their losses for the purposes of calculating which party has the greatest financial interest.

Courts in the Sixth Circuit generally take a "case-by-case" approach to determine if the members of a proposed group of plaintiffs can effectively work together to lead the proposed class, she said.

In this case, the seven pension funds provided "a joint declaration stating that they 'are dedicated to maximizing the class's recovery by ensuring this litigation is prosecuted in an efficient and cost-conscious manner and believe that [they] have put in place mechanisms to ensure effective decision-making and coordination and oversight of [their] chosen counsel,'" according to the order.

Judge Jarbou said she was "satisfied" with the pension funds' declaration of "their intent and ability to work together and represent the interests of the class."

IAM, represented by Robbins Geller Rudman & Dowd LLP, had additionally contended that seven funds made up too large a group to serve as a lead plaintiff, citing a "general rule" that a lead plaintiff group should have no more than five members.

The pension fund group had countered that the three Orlando, Florida, funds could be considered one entity, as they have the same executive director, are part of a unified investment strategy for the city's public investments and purchased the Neogen stock in a jointly held account.

The court determined it ultimately did not matter if the Orlando pension funds were one entity or separate entities because the "no more than five" rule is only a guideline, and the judge was satisfied that the close ties between the Orlando funds meant the group would not be unwieldy.

"Thus, the pension funds may amalgamate their losses, and they collectively have the largest financial interest of any potential lead plaintiff," Judge Jarbou wrote.

The institutional investors sued Neogen and two of its executives in July, alleging the company hid financial difficulties it faced after merging with the food safety division of 3M Co. in 2022.

Neogen led investors to believe the integration was progressing more smoothly than it was and that any hurdles were being resolved, according to the suit.

Then, in January 2025, the company revealed, among other things, that its net income for the most recent financial quarter was negative because of a $461 million write-down related to the business combination. It also revealed it had identified weaknesses affecting internal financial controls, and lowered the firm's revenue projections for the coming fiscal year.

From an August 2023 high of nearly $24 per share, Neogen's stock price dropped to just shy of $5 a share at the beginning of June 2025, a 79% drop that erased more than $4 billion of the company's market capitalization over the class period, the investors said.

Representatives of the parties did not immediately respond to requests for comment.

The lead plaintiffs are represented by Marco A. Dueñas, Maya Saxena and Lester R. Hooker of Saxena White PA, Karin E. Fisch and Vincent J. Pontrello of Grant & Eisenhofer PA, Robert D. Klausner of Klausner Kaufman Jensen & Levinson, and E. Powell Miller, Marc L. Newman and Dennis A. Lienhardt Jr. of The Miller Law Firm PC.

IAM is represented by Jason A. Forge, Danielle S. Myers, Michael Albert and Kenneth P. Dolitsky of Robbins Geller Rudman & Dowd LLP.

Neogen is represented by John A. Neuwirth, Stefania Di Trolio Venezia and Tanner S. Stanley of Weil Gotshal & Manges LLP and D. Andrew Portinga of Miller Johnson Snell & Cummiskey PLC.

The case is Operating Engineers Construction Industry and Miscellaneous Pension Fund v. Neogen Corp. et al., case number 1:25-cv-00802, in the U.S. District Court for the Western District of Michigan.