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G. Hudson

 
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  • Explanation Of Potential Damage Award In PharmAthene Versus Siga Lawsuit [View article]
    Here is a link to the case -

    http://bit.ly/1rzDKMZ

    RGC International Investors, LDC v. Greka Energy Corp

    Excerpt from page 32 of the above referenced Delaware SC May 24, 2013 opinion-

    "In RGC International Investors, LDC v. Greka Energy Corp.,78 although that Vice Chancellor confusingly awarded damages for both breach of an obligation to negotiate and promissory estoppel,79 he concluded that he should “award damages and security in the amount equal to what [the plaintiff] should have received” under the term sheet.80 He reasoned that the award was not speculative because the term sheet embodied “how the parties themselves agreed to value [the defendant’s] obligations to” the plaintiff.81"

    NOTE #79 for above- "See supra notes 72–74 and accompanying text (explaining that promissory estoppel cannot arise based on a promise contained in a fully enforceable contract)."

    MY COMMENT: The Delaware SC is basically saying that Vice Chancellor Stine did not have to reference promissory estoppel in this case to derive the lump sum expectation damage award he awarded.
    Jul 22 09:40 PM | Likes Like |Link to Comment
  • Explanation Of Potential Damage Award In PharmAthene Versus Siga Lawsuit [View article]
    My answer to your comment is derived from page 21 of SIGA's January 15, 2014 reply brief on remand-

    "The purpose of awarding damages for breach of contract is to restore the non-breaching party to the position it would have been in had the breach not occurred. Duncan v. TheraTx, Inc., 775 A.2d 1019, 1022 (Del. 2001). The Court of Chancery may not award damages that exceed the parties' reasonable expectations, measured at the time of breach, regardless of bad faith conduct, real or imagined. See E.I. DuPont de Nemours & Co. v Pressman, 679 A.2d 436, 445 (Del. 1996)"

    Also here is another excerpt explaining the difference between bad faith & fraud fro Black's Law Dictionary-

    "On the comparison with fraud, which Black’s Law Dictionary equates to "bad faith", there are two important distinctions: fraud does include bad faith but bad faith does not necessarily include fraud and "people go to jail for fraud. They don’t go to jail for bad faith" (Rocking Chair Plaza v Brampton 1988 29 CPC 2d 82)."
    Jul 22 07:18 PM | 1 Like Like |Link to Comment
  • Explanation Of Potential Damage Award In PharmAthene Versus Siga Lawsuit [View article]
    Yes I agree that Vice Chancellor has already addressed unjust enrichment but we come to different conclusions-

    Excerpt from Vice Chancellor Parsons' September 22, 2011 Opinion-

    "Conceptually, therefore, the fifth element of unjust enrichment might be satisfied. In this case, however, PharmAthene did not introduce evidence of such harm other than in connection with the overall relief it seeks based on its claims for SIGA’s breach of its contractual obligation to negotiate in good faith and promissory estoppel. A further finding of unjust enrichment would not lead to different or additional relief. Thus, I conclude that PharmAthene’s unjust enrichment claim effectively is subsumed in its breach of contract."

    MY INTERPRETATION: The relief sought currently by PharmAthene, as directed by the Delaware SC, is for expectation damages from SIGA's breach of its contractual obligation to negotiate in good faith. Since the unjust enrichment claim is subsumed by its claim for expectation damages, an unjust enrichment claim is not available even if it ends up that expectation damages can not be awarded and only reliance damages are awarded. In other words, if Judge Parsons is not able to calculate an expectation damage award with reasonable certainty, he can't just turn around and try to come up with another formula to calculate an unjust enrichment damage award.
    Jul 22 04:48 PM | Likes Like |Link to Comment
  • Explanation Of Potential Damage Award In PharmAthene Versus Siga Lawsuit [View article]
    There has been no press release concerning this because Judge Parsons is taking his sweet time and has not ruled on this legal case even though the last hearing (1/15/14) was over 6 months ago. Apparently Judge Parsons doesn't believe in the right to a speedy trial.
    Jul 22 02:20 PM | Likes Like |Link to Comment
  • Explanation Of Potential Damage Award In PharmAthene Versus Siga Lawsuit [View article]
    Excerpt from page 38 of the Delaware Supreme Court's May 24, 2013 Opinion-

    "we reverse the Vice Chancellor’s damages award and remand the case for
    reconsideration of the damages award consistent with this opinion."

    MY COMMENT: The SC made sure that Judge Parsons knew that when they remanded this case back to him- he needed to consider damage awards--> *** CONSISTENT WITH THIS OPINION***. The SC didn't indicate Judge Parsons had the freedom to find some off the wall idea to award PharmAthene a large damage award. Even though Judge Parsons tried to act like he had a lot of freedom, in his first follow up hearing back on August 15, 2013, to consider any damage award he wanted, he later on in that same hearing admitted that he didn't want any decision he made to be overturned again by the Delaware SC.
    Jul 22 11:56 AM | 1 Like Like |Link to Comment
  • How The Judge Will Arrive At A Remedy In SIGA V. PharmAthene [View article]
    My point was not so much about the market's reaction (though if it was on a day with high volume, the share price would probably jump high enough that it would draw a lot of attention) but the fact that a lot of business & investor type people who normally would be paying attention will be gone. I do think Judge Parsons resents the fact that he will have to let SIGA off the hook plus he doesn't like that the Delaware SC boxed him into a hole. He has already indicated within the transcripts that he doesn't want to risk the possibility of his next ruling being overturned.
    Jul 2 09:06 AM | 1 Like Like |Link to Comment
  • How The Judge Will Arrive At A Remedy In SIGA V. PharmAthene [View article]
    BOLD PREDICTION- So as to not attract much attention and give SIGA the benefit of a day with significant trading volume after a decision that will benefit SIGA - Judge Parsons will release his opinion late tomorrow (which will be in line with my conclusion- PharmAthene only entitled to reliance damages) (July 2nd) or early on July 3rd -> a lot of people leave early for a long weekend and trading stops at 1PM EST on Thursday 7/3/14 so not much publicity.
    Jul 1 05:51 PM | 1 Like Like |Link to Comment
  • How The Judge Will Arrive At A Remedy In SIGA V. PharmAthene [View article]
    I want to remind everybody the Delaware SC with their ruling made it clear as to what they expect of Chancellor Parsons on page 2 of their March 24, 2013 opinion-

    "A Delaware corporation appeals from the Vice Chancellor’s finding that it
    breached a contractual obligation to negotiate in good faith and is liable under the doctrine of promissory estoppel. We reaffirm that where parties agree to negotiate in good faith in accordance with a term sheet, that obligation to negotiate in good faith is enforceable. Where a trial judge makes a factual finding, supported by the record, that the parties would have reached an agreement but for the defendant’s bad faith negotiation, we hold that a trial judge may award expectation damages. We reverse the Vice Chancellor’s promissory estoppel holding because a promise expressed in a fully enforceable contract cannot give rise to a promissory estoppel claim. We also reverse the Vice Chancellor’s equitable damages award based on his factual conclusion that the parties would have reached an agreement, so that he may reconsider the award in light of this opinion."

    2 excerpts & my thoughts-

    Excerpt 1- "we hold that a trial judge may award expectation damages."

    definition of may- "a choice to act or not, or a promise of a possibility, as distinguished from "shall" which makes it imperative."

    My thought- so if Judge Parsons finds as he already has, which is well documented, that expectation damages are not proper, he will have fulfilled this requirement

    Excerpt 2- "We also reverse the Vice Chancellor’s equitable damages award"

    My thought- I don't believe that expectation awards allow for equitable damages such as the payment stream previously awarded - therefore the SC directs Parsons- "so that he may reconsider the award in light of this opinion."

    NOTE: Note #99 in the SC ruling clearly defines how to determine expectation damages and provides Parsons with cases to understand the limitations in trying to award them.
    Jun 26 05:08 PM | 1 Like Like |Link to Comment
  • How The Judge Will Arrive At A Remedy In SIGA V. PharmAthene [View article]
    One more point- The last sentence of note #99 sums up why Judge Parsons can't award expectation damages-

    "No recovery can be had for loss of profits which are determined to be uncertain, contingent, conjectural, or speculative."

    What the above statement of law **doesn't say**-

    1) you can split **uncertain** future profits as long as you can come up with a formula to determine the damages to be awarded

    2) Judge Parsons can use conjecture as to all the terms missing in the LATS to come up with a formula to split **uncertain** future profits

    Excerpt from note # 100 of the SC's ruling-

    "He also found “that the parties also recognized that the negotiations probably would introduce new terms and lead to some adjustment of terms expressly embodied in the LATS, while other terms in the LATS were almost certain to remain.” Id. at *35."

    NOTE: I have also been buying additional shares of both SIGA & PIP at these low share prices since they are bargain prices (ALSO NOTE: Buying a lot more SIGA than PIP)
    Jun 25 09:34 AM | 2 Likes Like |Link to Comment
  • How The Judge Will Arrive At A Remedy In SIGA V. PharmAthene [View article]
    Just as a reminder- it would seem that Judge Parsons is taking a lot of time for something that he should be able calculate with reasonable certainty as per note #99 of the Supreme Court ruling-

    "99 An expectation damages award presupposes that the plaintiff can prove damages with reasonable certainty. Callahan v. Rafail, 2001 WL 283012, at *1 (Del. Super. Mar. 16, 2001) (citation omitted) (“It is well settled law that ‘a recovery for lost profits will be allowed only if their loss is capable of being proved, with a reasonable degree of certainty. No recovery can be had for loss of profits which are determined to be uncertain, contingent, conjectural, or speculative.’”)."

    So you have to ask yourself the question-> What is taking so long for this decision of certainty OR was my Seeking Alpha article- " PharmAthene's Damage Award Will Be Limited To Reliance Damages" at the following link correct-> http://seekingalpha.co...
    Jun 25 08:47 AM | 1 Like Like |Link to Comment
  • A Case For Buying Both Siga And PharmAthene [View article]
    It depends as to whether the losing company decides to appeal the case to the SC. If both companies accept Parsons's ruling then the case is settled.
    Also the SC has to agree to hear the appeal.
    Jun 4 08:08 AM | 1 Like Like |Link to Comment
  • How The Judge Will Arrive At A Remedy In SIGA V. PharmAthene [View article]
    PharmAthene probably was like the bees in this situation. Unfortunately for PharmAthen, they, like the bees, aren't going to get paid a lot of money after the tree has bared it's fruit and is sold to the market by the farmer.
    May 30 08:42 AM | Likes Like |Link to Comment
  • How The Judge Will Arrive At A Remedy In SIGA V. PharmAthene [View article]
    Jeff,

    I still say Parsons is boxed into a corner and will not be able to award expectation damages. If he does, it will be overturned by the SC and will just cost both companies more legal fees over the long run. Hopefully Parsons has wised up and has figured out that reliance damages are the only damages available to PharmAthene.

    I look forward to seeing who is right. Have a great day!
    Glenn
    May 29 01:05 PM | 1 Like Like |Link to Comment
  • How The Judge Will Arrive At A Remedy In SIGA V. PharmAthene [View article]
    Excerpt from PharmAthene's 5/23/14 Form S-3 (NOTE: Sounds like a lot of uncertainty from someone expecting an award of expectation damages!!)

    As a result of the ruling of the Delaware Supreme Court, we no longer have a financial interest in ArestvyrTM and there can be no assurance that the Delaware Court of Chancery will issue a remedy that provides us with a financial interest in that product or another remedy.

    In its May 2013 decision, the Delaware Supreme Court reversed the remedy ordered by the Delaware Court of Chancery and remanded the issue of a remedy back to the trial court for reconsideration in light of the Delaware Supreme Court’s opinion. There can be no assurance that the Delaware Court of Chancery will issue a remedy that provides us with a financial interest in ArestvyrTM and related products, that SIGA will not appeal any subsequent decision by the Delaware Court of Chancery, or that SIGA will not be successful in any subsequent appeal. Even if the Delaware Court of Chancery does provide us a remedy with a financial interest in ArestvyrTM, we may never receive any proceeds from SIGA’s future sales of that product.

    In addition to the risks that ordinarily accompany the development and commercialization of biodefense products, including with respect to government contracting activities (including protests filed by third parties), competition (which with respect to ArestvyrTM includes potential competing products being developed by Chimerix, Inc.), FDA and other regulatory approval and commercialization efforts, which are described elsewhere in our risk factors, any interest we may have in future sales of SIGA’s product ArestvyrTM and related products is subject to additional risks.

    3 In particular, SIGA’s ability to deliver product to the strategic national stockpile ("SNS") (and potential foreign government purchasers), and the timing and profitability thereof (including the timing of SIGA’s recognition of revenue related thereto), are subject to a number of significant risks and uncertainties (certain of which are outlined in SIGA’s filings with the SEC) as to which we have limited knowledge and no ability to control, mitigate or fully evaluate. We have no first-hand knowledge of, and SIGA has not publicly disclosed, any information related to the potential margins or profitability of ArestvyrTM and related products.

    Even if the Delaware Court of Chancery re-instates its prior remedy or another remedy granting us a financial interest in ArestvyrTM, the potential value of any damages that may be awarded to us is subject to several variables, many of which are controlled by SIGA, and uncertainties, including the timing of any final decision by the courts, which preclude the current calculation of a predictable value of the SIGA litigation.

    In its May 31, 2012 judgment, the Delaware Court of Chancery awarded us the right to receive 50% of certain profits related to the sale of ArestvyrTM and related products for a specified period of time once SIGA retained the first $40.0 million in profits. However, as noted in the prior risk factor, although the Delaware Supreme Court affirmed in May 2013 that SIGA breached contractual obligations to us, its remand of the issue of the remedy back to the Delaware Court of Chancery for reconsideration has effectively deprived us of any current financial interest on ArestvyrTM and related products. We cannot predict whether the Delaware Court of Chancery will re-instate its prior remedy or order another remedy.

    We have taken the position in documents submitted to the courts, that our damages may be as high as $1.0 billion. SIGA has taken the position, in documents that it has submitted to the courts, that it owes us no or nominal damages. In addition, SIGA has taken post-judgment positions with respect to ArestvyrTM as to timing and costs (positions we dispute), which we expect SIGA may continue to take in the future, thus reducing or deferring SIGA's revenues from ArestvyrTM and related products and, correspondingly, potentially reducing or delaying any damages that would be owed to us. We intend to continue to vigorously pursue in court our position that, as a result of our successful breach of contract case against SIGA, we deserve significant damages in our award from the Delaware Court of Chancery. We can provide no assurance that we will succeed in our litigation strategy or, as stated above, that the Delaware Court of Chancery will re-instate its prior remedy or provide any remedy at all.

    Even if we are awarded a remedy by the court, we are unable to control or predict the timing of sales of or whether or when SIGA will recognize any profits with respect to ArestvyrTM or related products. It is possible that SIGA could discontinue development, production or sales of ArestvyrTM and any related products at any time such that we would not collect any damages.

    Our ability to use our net operating loss carryforwards (NOLs) may be limited.

    We have incurred substantial losses during our history. If the Delaware Court of Chancery does not provide us with a remedy in our on-going litigation with SIGA that requires SIGA to make a significant lump sum payment to us or on-going payments related to sales or profits of Arestvyr™ and related products (and any such remedy is not affirmed on appeal), we are highly unlikely to be profitable for the foreseeable future and therefore, will not generate future taxable income that we can use our NOLs to offset. As of December 31, 2013, we had federal NOLs of $144.0 million. The $144.0 million in NOLs will begin to expire in various years between 2022 and 2033, if not limited by triggering events prior to such time. Under the provisions of the Internal Revenue Code changes in our ownership, in certain circumstances, will limit the amount of NOLs that can be utilized annually in the future to offset taxable income. In particular, Section 382 of the Internal Revenue Code imposes limitations on a company’s ability to use NOLs upon certain changes in such ownership. If we are limited in our ability to use our NOLs in future years in which we have taxable income, we will pay more taxes than if we were able to utilize our NOLs fully. For example, as a result of a previous change in stock ownership, the annual utilization of the NOL carryforwards generated in tax years prior to 2007 may be subject to limitation. We have not completed an analysis under Section 382 to determine what, if any, impact any prior ownership change has had on our ability to utilize our NOLs. Until such analysis is completed, we cannot be sure that the full amount of the existing NOLs will be available to us, even if we do generate taxable income before their expiration. In addition, we may experience ownership changes in the future as a result of subsequent shifts in our stock ownership that could result in further limitations being placed on our ability to utilize our NOLs. Sales of shares by us pursuant to this prospectus could in fact result in ownership changes which could have the effect of creating additional limitations on our ability to utilize our NOLs. The Board of Directors may not undertake an analysis under Section 382 to determine the impact of any such sales on our ability to utilize our NOLs at the time it authorizes such sales.

    May 25 12:17 PM | 2 Likes Like |Link to Comment
  • How The Judge Will Arrive At A Remedy In SIGA V. PharmAthene [View article]
    VinceP,

    I think both stocks are valued almost as though neither company will win this battle. When we look at just the monetary value of the current BARDA contract, SIGA should end up having somewhere around $250 million dollars of cash on their balance sheet by the end of the 2nd quarter of next year. When we add up both PIP's & SIGA's current share price it is less than the value of that cash divided by the average # of shares outstanding for both companies- $250 million divided by 53 million shares = $4.72 per share versus the current share prices- PIP - $1.55 & SIGA - $2.55 for a total share price of $4.10. So if anyone owns equal number of shares of both companies, they should automatically come out ahead regardless of who wins the court battle especially since the above $4.72 doesn't put any value towards more BARDA awards or the other drugs in the two companies pipelines.

    I own shares in both companies but significantly more in SIGA since I believe they will come out on top in this battle. Judge Parsons should be embarrassed about waiting this long to come out with a ruling. If you review most cases, there usually is a ruling within 60 days and almost always 90 days. I think the reason he is taking so long is that he can hardly stand that he has to come out with a ruling that is in line with what SIGA has been saying all this time.

    As far as any BARDA re-order, I don't think SIGA will even give a hint as to the likelihood of that until after Parson's comes out with his ruling.
    May 21 11:58 AM | 2 Likes Like |Link to Comment
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