What are your thoughts on likelihood of SIGA declaring Chapter 11 if the ruling ends up being an absurd amount and SC won't reverse or amend the original decision? I'm not well versed in corporate law, but I would think RP would lose his share of the company as well as the other BOD, Chief Scientist etc. Plus, there would be and endless fight in bankruptcy court over assets such as 246 and the other drugs SIGA has in the pipeline. I certainly don't think it is in PIPs interest to force this, just as much as it isn't in shareholders interest either, and that includes the big fish that own a piece of the company.
In the unlikely event Parsons' ruling makes it through the SC unscathed, it is in neither parties' interests to start litigation again in bankruptcy court. There would be a quick settlement, pip would agree to get their money paid out over some sort of extended timeline as it came in from the barda contract. People suggesting pip will drive siga into bankruptcy, take all their cash, and somehow gain control of the drug have a limited understanding of how the world works. The only reason there hasn't been a settlement thus far is that the parties have been so far apart on what damages are going to end up being (and because they hate each other but they will set that aside). Once damages are finalized in stone one way or another after this appeal to the SC, both parties will be forced to come to settlement terms quickly. I expect this is what Parsons intended to force with this ruling. Or maybe this ruling gets remanded like the last one and the carousel keeps spinning.
Fundamentally, I don't see Parsons ruling making it through the SC without the amount of the award being substantially reduced. Siga has strong arguments to make on appeal and I expect at least some of them will stick. However, in the unlikely scenario the SC lets this stand, I expect the parties to settle immediately, pip will get their roughly $200 million over some length of time, siga will get the rest of the existing contract, so maybe roughly $100 million, the rights to the drug, and all future contracts.
And there will be future contracts, that's where siga will make its money. I love that siga no longer has to worry about giving pip a dime on any new contracts and limiting the award to $200 mil to pip would be something I can live with. This is where people able to buy now will make money. I'd wait until the damages number is finalized though.
Thanks for the thoughtful and balanced response. We may not agree completely with the messy middle (SC response to appeal), but I completely agree with your view of the end game. If they are able to arrive at a settlement, I will be interested in participating in upside of remaining unfilled need that exists in SNS. I have been long SIGA in the past (call options as a hedge) and would go long the stock once the overhang regarding the damages number is removed.
At a daily accruing interest of $39K per day, how can SIGA afford to delay settlement and fight another round to DESC? Plus put up an appeal bond for at least $200M? Sort of like Hitler throwing all his last resources into Battle of the Bulge. If SIGA wants to be alive for collecting all future sales without royalty to PIP, they should just settle TODAY and pay the conceded $200M. Otherwise the drug assets will be handed over in BK to PIP. I am also wondering when the shareholder lawsuits against management & BOD will commence for reckless & irresponsible pursuits?
"Great question and interested to hear his response."
It's obvious from your endless chatter, selective analyses & wanton speculation based on facts that you want to exist to support your pipe dream but that do not exist that you have not taken your 4 bits of gain & gone to dinner before you lose them.
There will be no SIGA BK based on Parsons' opinion.
The SC will excoriate Parsons again deservedly.!
SIGA will continue to deliver THE CURE & continue to be paid.
PIP eventually will declare BK because their grants game will be terminated in the absence of huge payments to lobbyists like Tommy Thomson & influential politicians like John Murtha.
PIP and its history of payments to obtain grants, failure to develop a product that works, failure to protect its interests & failure to negotiate with SIGA to submittal of allegedly fraudulent progress reports to FDA will not be put on life support by the SC.
PIP will never receive a penny from SIGA & will never merge with SIGA because of their history & animus.
Over time SIGA, THE CURE & any other SIGA products will be the core of an RP philanthropy & he will fight
to insure that his philanthropic plans are not disturbed by the likes of PIP et al?
Watch & learn.
PIP and your 4 bit gain will disappear;SIGA will be a huge winner for all & esp society.....global society!