My concern is that the DOE low interest loan given to ADA to construct the Red River Carbon Plant was obtained fraudulently. The technology cannot be commercially available to be eligible for the loan.
Given that the arbitration panel awarded NORIT royalties for the next 3 yrs production of 10% and the following 5 yrs at 7% for "misappropriation of certain trade secrets." So, the major portion of the award could turn out to be for stealing trade secrets. I noticed ADA did not clarify this in their 8K.
Now if ADA stole secrets from NORIT, that (the stolen secrets)could be construed as commercially available.
ADA is going to have to figure out how to sidestep this issue to remain viable, otherwise, NORIT may become the new owners at Red River.
>>>The law firm that advised them appeared to have bad judgement, but that's not uncommon for lawyers. If law firm can bill you and make enough of a case to go to or stay in court, they'll always say you have a good case.<<<
It is also common for clients to NOT listen to their lawyers, too. Also, the panel gave an "Interim Award which portends an additional award later.
TRP, I do know management and though far from "perfect" I still trust them. They had asked their legal counsel at the time whether the No-Compete would be an issue in pursuing the Luminant contract and were told that they should be clear to pursue them. I believe this was based upon the fact that ADA had been in discussions with Luminant before Norit was introduced to the mix. Unfortunately for all of us, the legal system disagreed and found for Norit.
The $38mil award is based on that $100mil multi yr contract with Luminant so it would seem appropriate to me that the penalty should be spread across the term of the contract (4-5yrs?). That would make the cash flow to fund the $38mil much more palatable.
Norit wants it right now because they want primarily to cripple ADA-CS but have been unable to do so as yet due to ECP's bottomless pockets. My guess is that their primary objective now is to hamper ADA-CS from making long-term AC contracts by casting suspicion on their status due to the uncertainty from the suit. This is also why Norit has had no interest in settling the suit if any settlement was ever offered.
Still lots of questions but we still have high confidence in the Cyclene prospects. An update on the details & impact of this suit and the status of Cyclene contracts should be forthcoming but probably not until the Arb Panel defines what & how the penalties are to be assessed.
Still very long, keep praying...
Point of clarification: The judgement was for (as per Businesswire PR)10.5% for 3 yrs, then 7% next 5 yrs of the production at Red River for misappropriation trade secrets. Present capacity there is now about 100-125 Million lbs/yr. They have another line under construction, and fairly near completion. Would this output also be subject to the penalty royalties? I have heard that PAC is over $1/lb these days.
The royalties don't apply to AC sold under contracts that ADES-CS won but wrongfully competed against Norit for.
The royalty awarded to Norit applies to all other AC produced at the Red River plant within the time limits noted.
Since AC is in high demand, I suspect that the price will continue to go up and the Red River plant should be able to pay this royalty without any problem.
I believe management is reluctant to make any comments on the Arb Panel's findings because the panel is still deliberating how to assess the penalties, ie timing, amounts, methods.
They do not want to make any antagonistic comments for fear that it may impact these elements to ADA's disadvantage.
After these decisions have been made, then ADA may be able to file an appeal to the monetary amounts and/or methods/timing of payments as well as issuing a PR on their take on the findings and what their next steps may be.
Still lots of unknowns...
I don't think so.
One of Norit's demands was for the assignment of an ADA patent, which was denied by the arbitration panel. I believe that ADA could hang their hat on this item to demonstrate originality.
I think you are probably right,these lawsuits tend to quickly distill the fluff down to the essence. Still, I can't help but wonder what the trade secrets that were misappropriated actually were. And what makes them so valuable to be worth 7 - 10% next 8 years of Red River production.