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PharmAthene, Inc. Message Board

  • applesandspice applesandspice May 28, 2013 5:19 PM Flag

    Lump sum speculative, income split not speculative

    Per page 99 of Parsons 9/22/11 opinion.

    "Under these facts,expectation damages in the form of an equitable payment stream akin to a constructive trust or an equitable lien on a share of the proceeds from ST-246 deserves serious consideration.

    Applying the equitable principles and remedies discussed supra to the facts of this case, I conclude that an appropriate remedy would be to afford PharmAthene a stream of future payments if and when commercial sales of ST-246 commence, after accounting for
    certain marginal expenses."

    Sentiment: Strong Buy

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    • {Quote from Applesandspice} "Applying the equitable principles and remedies" {/quote}
      The real question at hand is whether or not Parsons has "Equitable Remedies" available to him this time around. I don't know the answer. The Supreme Court also found that :
      "SIGA is not liable under a theory of promissory estoppel......... The  promise to  negotiate in 
      good faith for a definitive license agreement in accordance with the LATS’s terms 
      is expressly included in both the Bridge Loan and Merger Agreements.  Therefore, 
      a claim based on promissory estoppel cannot lie and a Vice Chancellor must look 
      to the contract as the source of a remedy on the breach of an obligation to negotiate 
      in good faith...........because it is unclear to what extent the Vice Chancellor 
      based his damages award  upon a  promissory estoppel  holding  rather than upon a 
      contractual theory of liability predicated on a Type II preliminary agreement, we 
      reverse  the  Vice  Chancellor’s  damages  award  and  remand  the  case  for 
      reconsideration of the damages award consistent with this opinion.  "

      So, the 640 million dollar question is: whether or not Parsons has "Equitable Remedies" available to him this time around. He is already on record as saying that expectation damages are unknowable and therefore basically unawardable.

      One thing I learned from the last go around with the trial is that no amount of wikipedia lawyer-ing is going to net anyone a definitive answer. Additionally, even those investors who correctly predicted the outcome in Pip's favor got burned and lost money. The folks who bought both Pip and Siga so they "couldn't lose" actually lost the most as both stocks were decimated after the decision.
      My advice to all you would-be wikipedia lawyers is this: Stay away, period. Me, I'm stuck as an LT holder waiting to get back above water. My takeaway from this whole mess is to never again invest in something with a cloud of legal uncertainties overhead!

      • 1 Reply to donraskopf
      • {Quote from donraskopf}
        "So, the 640 million dollar question is: whether or not Parsons has "Equitable Remedies" available to him this time around. He is already on record as saying that expectation damages are unknowable and therefore basically unawardable"
        At trial Judge Parsons found SIGA liable under the equitable theory of Promissory Estoppel. He then used the Court's equitable power to fashion a remedy where none was provided by law, i.e., 50/50 split of profits after the first $40 mil. The Supremes reversed liability under promissory estoppel, but found liability under contract law. The Supremes also held that expectation damages were awardable for breach of contract, and remanded the case for Parsons to award PIP the "benefit of their bargain" (expectation under the contract). Note that the Supremes didn't say anything about a monetary award. As Golongin2008 pointed out in a post on the SIGA board yesterday, two problems would arise in awarding PIP a lump sum award. First, a lump sum would have to be based on the situation as it existed at the time the contract was entered, at the time of which little was known about the viabilty and profitability of ST-246, thus making it difficult to calculate a monetary award. Second, how fair would it be to award PIP a lump sum in the millions, and then something happens to make the drug not marketable at all after SIGA paid the lump sum? Both are very good points which would have to be considered by Parsons on remand.
        Under the specific terms of the contract found to exist by the Supremes, PIP was not necessarily expecting a lump sum of money, but actually an exclusive license to sell ST-246 with royalty payments to SIGA as specified in the LATS. If the contract had been honored, PIP and SIGA would have equally shared the risk that ST-246 never made it to market. My question is this: does anyone know of any legal reason by Parsons could not avoid potential uncertainty of damages issues by
        (cont)

    • Precisely; At least someone can read.!

    • Parsons is fully aware that over $2 ((B)) in sales is a likey possiblity, just to the US. SIGA & PIP have some big upside for investors. I just prefer PIP because Perelman and his many subsidiaries are nonstop diluters of the Siga shareholders.
      Good luck to the mass of day traders likely now in both stocks. Please take it lower, I really would like to load up on cheap shares.
      GLTA

      • 1 Reply to cash2go
      • Riggggggght,.....insider ownership of PIP (3%),.......SIGA (33%). Hmmmmm,.....yeah a lot of confidence in what they're peddling. That was a great PR by PIP's hierarchy. Track the PIP website, keeps changing daily as to what they want to present and have interpreted.

        The lawsuit cloud continues,....just a lower number coming your way. Follow the money!

 
PIP
1.71-0.02(-1.16%)Jul 29 4:02 PMEDT