Mr Donal Geaney, the former chief executive of Elan, has taken an unfair dismissal action against the pharmaceutical group.
A motion to enter the case in the Commercial Court list was listed on January 21st.
Mr Geaney was not available for comment, but sources close to Mr Geaney said that the case also deals with his options over Elan shares and the deadline for exercising them. The options could be worth $20 million (€15.3 million) based on the company's current share price.
Elan has refused to comment on the case, but a spokeswoman for the company said yesterday: "Elan is confident that it has treated its former executive fairly and respectfully."
The former KPMG partner was chairman and chief executive of Elan until July 2002, when he resigned in the wake of a collapse in the company's shares.
He had led the company since 1997, when he succeeded company founder Mr Don Panoz as chairman.
He joined the company as executive vice-president with responsibility for strategic planning in 1987, having advised on its Nasdaq flotation in 1984.
After stepping down in 2002, he remained on as an adviser to the new chairman, Mr Garo Armen, for a further 12 months at his then base salary of $520,000. Mr Tom Lynch, the Elan vice-chairman, stepped down at the same time.
According to the company's 2002 annual report, Mr Geaney had options over almost 2.6 million Elan shares at an average subscription price of $17.65.
Elan shares are currently trading at over $26, implying that Mr Geaney's options could be worth in the region of $20 million assuming he has not exercised them.
Elan has not published any information on Mr Geaney's share options since he left the board, and declined to comment yesterday on whether he has exercised any options since 2002.
Elan's shares fell from more than €40 a share to close to $2 in the first six months of 2002. It followed suspension of trials of its Alzheimer's drug and queries about its accounting policies in the media. These led to a investigation by the Securities and Exchange Commission (SEC), which concluded late last year.
The company was subsequently turned around by Dr Armen and a new chief executive, Mr Kelly Martin. Shares in Elan rose steadily last year on the back of a stream of good news.
In October last year, the company paid $75 million to settle a class action taken against it, Mr Geaney and other executives. The class action was taken by investors who lost money when Elan's shares collapsed in 2002.
The company also agreed to pay a $15 million civil fine to the SEC in return for the commission ending its investigation. The company said that it "will neither admit nor deny the allegations".
