The U.S. Bankruptcy Court for the Southern District of New York approves SIGA Technologies' (NASDAQ:SIGA) plan to pay off its remaining balance of the outstanding judgement of $93.7M plus interest to PharmAthene (NYSEMKT:PIP) no later than November 30.
SIGA was forced to pay PharmAthene over $200M after it lost litigation over a smallpox antiviral.
PharmAthene (PIP +2.6%) reports that it received $90M from SIGA Technologies related to the settlement of their litigation over smallpox antiviral Arestvyr. It has now received $115M plus $6.6M in interest. SIGA has until the end of November to pay the remaining $93.7M plus interest.
SIGA Technologies (OTCPK:SIGAQ) has paid PharmAthene (NYSEMKT:PIP) $20M to extend the settlement date of its smallpox antiviral litigation judgement to October 19. The amount will be credited against the $205M plus interest that SIGA owes.
SIGA Technologies (OTCPK:SIGAQ) emerged from Chapter 11 bankruptcy yesterday under a reorganization plan negotiated between the company and the Statutory Creditor's Committee, which includes PharmAthene (NYSEMKT:PIP), and approved by the U.S. Bankruptcy Court for the Southern District of New York.
Under the terms of the plan, SIGA has made an initial nonrefundable $5M payment to PharmAthene that will be credited against the final satisfaction of PharmAthene's ~$205M claim plus interest. The entire amount must be paid no later than October 20 by either paying the entire amount in cash plus interest that will accrue at 8.75% or 100% of SIGA's common stock (SIGA's choice) or another treatment mutually agreed upon by the companies and approved by the Court.
If SIGA pays in cash, PharmAthene intends to distribute at least 90% of the after-tax proceeds to shareholders. It plans to use the remainder for M&A deals or partnering transactions. If SIGA elects to deliver 100% of its stock to PharmAthene, then it will develop a plan for operating SIGA as a separate business.
SIGA filed for bankruptcy protection in December 2015 after losing its litigation with PharmAthene over a smallpox antiviral that began in 2006.
The Delaware Supreme Court affirms the earlier judgement by the Court of Chancery that awarded PharmAthene (NYSEMKT:PIP) $195M from SIGA Technologies (NASDAQ:SIGA)(OTCPK:SIGAQ) related to their litigation over the smallpox antiviral Arestvyr that began in 2006.
SIGA chief Dr. Eric Rose says, "We are surprised and very disappointed by this ruling. Nevertheless, in anticipation of [the ruling], on December 15, 2015 SIGA filed a plan of reorganization in its pending case under Chapter 11 of the U.S. Bankruptcy Code. The plan, among other things, affords SIGA with certain options to satisfy PharmAthene's claim. The plan is supported by the Official Committee of Unsecured Creditors appointed in SIGA's Chapter 11 case, of which PharmAthene is one of two members. We remain absolutely committed to continuing to produce and deliver our smallpox antiviral drug, Tecovirimat, to the U.S. Government's Biomedical Advanced Research and Development Authority, pursuing FDA approval and operating our business."