"value of contract" speculative at time of negotiations?
People keep saying on this board that the value of the contract was too speculative at the time of negotiations to issue an award based on expecation damages. The supreme courts opinion of this case states when discussing the sequence of events (top of page 4): "By the end of 2005, both Siga's and Pharmathene's conservative estimates valued ST-246 at approximately $1 billion." $1 billion sounds to me like a nonspeculative number.
Mute point right now but I still don't get why Siga was obligated to negotiate the nonbinding , often unsigned Lats agreement. No response necessary for this latter point. It has been beaten to a pulp.
SIGA and PIP may have agreed that the contract had a potential value of $1B, but no gaurentee that a contract would EVER be granted, much less for an amount remotely close to $1B. The contract was not awarded until 2011, and in an amount less than half of the $1B claimed. The uncertainty was compunded by the doubts regarding the remaning steps to complete the products development and approval by the FDA.
"The contract was not awarded until 2011, and in an amount less than half of the $1B claimed."
And, at one point for a period of months, SIGA was found to be ineligible for participation in the bidding. Now, how in the world can the fact that BARDA would re-write the contract in a way to allow SIGA be certain in any way back then?
Tells you just how right Parson's was in his foresight that expectation damages were too speculative or uncertain to award.
Again...If the Court had bought the "expert" testimony of perhaps both parties, and ignored common sense, and judicial wisdom, he might have found the value of ST-246 in 2006 was indeed "a billion dollars".
How would that ruling look today given the fact that the BARDA contract was reduced from a possible value
of 2.8 billion dollars to 450 million dollars, and the current market value for Siga, in total, and as a going concern, is just 200 million dollars. Literally one fifth of the so called value of ST-246 alone per the "experts" back in 2006.
Do you really think the PIP folks expected to share equally in a "billion dollar" drug for advancing a company3 3 million dollars that was repaid in full plus interest?
golong, Bloomberg and Siga states that this will be argued again. What could either company offer the Chancery Judge at this point , seems that he has only one choice to make, expectation damages.
William J. Haynes II, SIGA's General Counsel, commented, "We are pleased with the Delaware Supreme Court ruling issued on Friday. The Supreme Court's decision states that PharmAthene may only obtain damages for its lost expectancy if it can prove them 'with reasonable certainty.' We intend to establish to the Chancery Court, consistent with that Court's earlier conclusions, that PharmAthene's evidence of expectancy damages is speculative and too uncertain, contingent, and conjectural to permit an award