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SIGA Technologies, Inc. Message Board

tla_usa 213 posts  |  Last Activity: Sep 17, 2014 6:40 PM Member since: Nov 14, 2010
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  • tla_usa tla_usa Sep 17, 2014 6:40 PM Flag

    I have invested in common stock positions in companies before Chapter 11 bankruptcy is declared. But I do so only for companies with cash-flow insolvency and not with balance-sheet insolvency.
    In reorganization under chapter 11 the shareholders of companies with balance-sheet insolvency will be wiped out by the reorganization. They will have no interest in the NewCompany that comes out of the re-organization process.

    In reorganization under chapter 11 the shareholders of companies with cash-insolvency (and no balance-sheet insolvanecy) will NEVER be wiped out by the reorganization. These pre-bankruptcy shareholders will become shareholders in the NewCompany that comes out of the re-organization. And such investments can turn out to be extraordinarily profitable. With GGP I made about 30 times my initial investment in a year and half.

    SIGA is clearly a company that faces only a cash-flow insolvency. But SIGA is no GGP. At $1 entry I see reason to except a $2 gain in 3 years or so.

  • tla_usa tla_usa Sep 17, 2014 3:15 PM Flag

    Bankruptcy court has the power in effect -- without discharging a debt --- to make a reasonable estimate of litigated debt, and set up a litigation reserve. Then assets of OldCompany are divided between OldCompany and NewCompany.

    The litigation reserve is an asset of OldCompany. There is no haircut. And OldCompany purses the appeal. And perhaps keeps some of the litigation reserve.

    PIP would fight to get the litgation reserve to be the maximum they could expect in Delaware. But would likely fail.

    Just my perspective for now. Go figure, TLA

  • tla_usa tla_usa Sep 17, 2014 2:59 PM Flag

    I agree with your report. litigation can and will proceed in tandem.

    And I would add the following: In Delaware we can expect a slow process. But the NY Bankruptcy Court. does not have to wait for a decision by the DelSC or ChanceryCourt on the amount of the award before setting up a litigation reserve. And can do so without the consent of PIP or the consent of the DelSC or the consent of Parsons ..And once that is done, the assets of NewCo are out of reach of PIP. And PIP would get the litigation reserve. The Delaware courts may however on second remand decide on less. Hence SIGA
    Oldcompany should purse appeal. But the show may end effectively end in NY bankruptcy court for SIGA NewCompany

    Just my perspective pending more definitive information. Go figure, TLA

  • tla_usa tla_usa Sep 17, 2014 2:33 PM Flag

    Posted above: " .......the only way the BR court gets jurisdiction of the SIGA/PIP litigation is if the Delaware Supreme court reverses or remands the case again...."

    I dont agree. This point is not certain under any scenario -- and indeed in unlikely to be true. What is true is that the court will still have to determinte whether the claims made by SIGA for bankrupcy protection now are legal and factually correct and suffiecient.

    Just my perspective pending more definitive information. Go figure. TLA

  • tla_usa tla_usa Sep 17, 2014 2:15 PM Flag

    Point of clarification to my post above.

    My post about covers the WSJ coverage of the hearing today. From the WSJ I take only this: :"Today's purpose is to preserve the status quo," Judge Lane said

    The rest of that post --- including the "in the drivers seat for a new record" remark --- is my perspective. Not that of the WSJ.

  • tla_usa tla_usa Sep 17, 2014 2:00 PM Flag

    Before anyone gets upset let me say that what I am going to say is just my perspective.

    With Perelman controlling SIGA I don't count on more than a PE of about 4.
    I don't see any value to the pipeline results expected in the next 3 years.
    I feel that a doubling of money in a three year timeframe is within reason.

    The valuation lid is the uncertainty as to whether RP would do a reverse merger with a low PE valuation. Buying both SIGA and PIP for a three or four year hold I see as less profitable then SIGA alone.

    But if SIGA gets delisted and goes on the Pink Sheets the price might get low enough to make these to change my current expectations.

    When the docket activity picks up I may need to revise my thinking again. Go figure. TLA

  • tla_usa tla_usa Sep 17, 2014 1:37 PM Flag

    The WSJ covered the Hearing at 10 am today (9/17.2014)
    "Today's purpose is to preserve the status quo," Judge Lane said
    The rest of the story is merely information from the Rose statement filed in the docket yesterday.

    Significantly there was no mention as to whether PIP would oppose the SIGA arrangement of avoiding the use of a Trustee or the avoiding of PIP becoming a debtor in possession.

    Significantly there was no mention of whether PIP would oppose on the grounds of ripeness.

    Significanltyl there was no mention of whether PIP would challenge to be the debtor in possession.

    Significantly there was no mention whether SIGA would want to stay portions of the appeal to the DelawareSC until after hearings by the bankruptcy court in NY to determine the amount of litigation reserve needed to proceed with an OldCompany NewCompany reorganization.

    This approach could conceivably would have the Bankruptcy Court in the drivers seat for a new record for damage award estimates. And this result would estop the award amount determination process in Delaware. But most critically it would enable SIGA to enter new evidence as to the uncertainty of satisfying the scientific challenges to meeting the FDA animal rule.

    Prior testimony from experts in Delaware did not cover this. Those experts had backgrounds in economics and were not qualified to introduce such evidence (and did not). This evidence would show that the monkey trial served to decrease the uncertainty of probability of success as to scientific challenges from about 1% to about 4%. And without success on the science pertaining to internal validity and external validity of the evidence to satisfy the FDA animal rule there could be no reasonable expectation of selling ST-246. The PIP money helped pay for a monkey trial that was not sufficient in principle to satisfy either internal validity or external validity.

  • tla_usa tla_usa Sep 17, 2014 5:01 AM Flag

    I do not know whether SIGA has the options noted in the top post of this thread.
    If they do then these options could have a major impact on the relative valuations of SIGA and PIP.
    I will be watching the docket activity.
    I am not sure that the price of SIGA will get low enough to please me. And even if it did I might not buy it.
    Go figure, TLA

  • **Alternatively, the bankrupt debtor may
    seek to have the civil action “removed” from
    the nonbankruptcy court, other than a U.S.
    tax court, to the bankruptcy court.46 Procedurally,
    the debtor must file a notice of
    removal with the district court and with the
    state court in which the litigation is pending.
    Once removed, the district court will then
    refer the case to the bankruptcy court. In
    most district courts, however, an order automatically
    refers the matter to the bankruptcy
    court, and the notice of removal can be filed
    directly in the bankruptcy court rather than
    the district court.**

    **If a litigant opposes removal to bankruptcy
    court, it can file a motion to remand
    or abstain in the district court.48 In deciding
    whether to oppose the removal, civil litigants
    should consider its consequences. Once a
    civil lawsuit is removed to the bankruptcy
    court, it becomes an adversarial action subject
    to the Federal Rules of Evidence and the
    Federal Rules of Civil Procedure to the extent
    that they are incorporated by the Bankruptcy
    Rules of Civil Procedure. Therefore, the rules
    governing discovery, evidence, and dispositive
    motions will likely be different than if the case
    were pending in state court and could affect28
    the outcome of the case.**

    **If an objection is made to the proof of claim,
    the bankruptcy court is entitled to have a
    hearing and receive evidence to determine the
    validity and amount of the claim.55 In addition,
    when a claim is contingent or unliquidated, the
    bankruptcy court is entitled to make an estimation
    of the amount of the claim to prevent
    undue delay in the administration of the case.56
    Because the bankruptcy court’s determination
    of the amount of the claim can collaterally
    estop that determination in state court, often
    litigants with pending civil actions will seek
    relief from the automatic stay to have the civil
    trial court liquidate the claim.**

  • tla_usa tla_usa Sep 16, 2014 9:48 PM Flag

    Part - 4
    (from Rose's statement)
    ++++++++The Court of Chancery then compounded its error by ignoring other postbreach evidence that clearly showed the speculative nature of PharmAthene’s damages case and should have led to no damages at all, or at most to a much smaller damages calculation. 

    For example, the Court ignored the fact that the first sale of Tecovirimat did not occur until 2013, instead speculating without any reasonable basis in fact that sales would have begun in 2010. This erroneous conclusion itself more than doubled the damages calculation. 

    Similarly, the Court, while relying on evidence of sales seven years post-breach, ignored the fact that only 2.0 million courses have ever been sold, instead speculating on the basis of a discredited model that 14.9 million courses were reasonably likely to be sold between 2010 and 2014. This utterly speculative conclusion also greatly inflated the calculation of damage+++++++++

    (from another docket document)
    Confirmation of a chapter 11 plan may result in a discharge of debts, which may include all or part of your debt. See Bankruptcy Code § 1141 (d). A discharge means that you may never try to collect the debt from the debtor, except as provided in the plan.

    If you believe that a debt owed to you is not dischargeable under Bankruptcy Code § 1141 (d) (6) (A), you must start a lawsuit by filing a complaint in the bankruptcy clerk’s office by the “Deadline to File a Complaint to Determine Dischargeability of Certain Debts” listed on the front side. The bankruptcy clerk’s office must receive the complaint and any required filing fee by that deadline]

    (more on BC code $1141 (d)(6)(A) in part -5 )

  • tla_usa tla_usa Sep 16, 2014 9:38 PM Flag

    Part -3 (from Rose's statement)
    +++++Although the Court of Chancery has not yet issued a final judgment specifying the dollar amountof such damages, SIGA expects it to be substantial – as much as $232 million (or more with post-judgment interest and attorneys’ and expert fees++++++++++

    +++++35. On August 18, 2014, PharmAthene submitted its expert’s calculations of damages and the Backup Material. Based on such calculations, PharmAthene stated that the amount of damages is approximately $232 million (inclusive of pre-judgment interest but exclusive of professional fees and expenses).

    On September 3, 2014, SIGA (reserving all rights to appeal) submitted its objections and damage calculations and asserted that, based on the methodology ordered by the Court of Chancery, the damages are approximately $173 million (inclusive of pre-judgment interest but exclusive of professional fees and expenses).+++++++++

    +++++++The BARDA Contract (without taking into account options) is worth approximately $463 million, including $409.8 million for procurement-related activities and $54 million of potential reimbursements related to development and supportive activities

  • tla_usa tla_usa Sep 16, 2014 9:20 PM Flag

    Part -2
    United States Bankruptcy Court Southern District of New York
    Identifier: gov.uscourts.nysb.252770
    Assigned-to: Judge Sean H. Lane
    Case-name: SIGA Technologies, Inc
    Court: nysb
    Date-case-filed: 2Part 014-09-16
    Docket-num: 14-12623
    Pacer-case-num: 252770

  • Part -1
    Notice of Hearing / Notice of Commencement of Chapter 11 Case and First-Day Hearing (related document(s)13, 8, 5, 3, 10, 9, 1, 11, 2, 6, 12, 14, 4, 7) filed by Stephen Karotkin on behalf of SIGA Technologies, Inc.. with hearing to be held on+++++++ 9/17/201++++4 at 10:00 AM at Courtroom 701 (SHL) (Karotkin, Stephen)

    Notice of Hearing / Notice of Commencement of Chapter 11 Case and First-Day Hearing (related document(s)13, 8, 5, 3, 10, 9, 1, 11, 2, 6, 12, 14, 4, 7) filed by Stephen Karotkin on behalf of SIGA Technologies, Inc.. with hearing to be held on ++++ 9/17/2014++++ at 10:00 AM at Courtroom 701 (SHL)

    Statement of Financial Affairs due ++++09/30/2014+++

    Incomplete Filings due by++++ 09/30/2014++++

    Initial Case Conference due by++++ 10/16/20140+++++

    Chapter 11 Plan due++++!/14/2015

    Disclosure Statement due by ++++1/14/2015+++

  • Likely consequeces would include the following:

    The daily sales volume woulld be less then it is now.
    Instututions would sell off.
    No margining and no shorting.
    Lower share price because of being on the pink sheet.

  • Reply to

    Where is this abnormal selling volume coming from?

    by tla_usa Sep 4, 2014 4:21 PM
    tla_usa tla_usa Sep 4, 2014 4:33 PM Flag

    The Government is holding preferred stock .

  • Reply to

    Where is this abnormal selling volume coming from?

    by tla_usa Sep 4, 2014 4:21 PM
    tla_usa tla_usa Sep 4, 2014 4:31 PM Flag

    To good to be true. Why not a private sale --as before -- between Ichan and Fairholme?

  • Reply to

    Where is this abnormal selling volume coming from?

    by tla_usa Sep 4, 2014 4:21 PM
    tla_usa tla_usa Sep 4, 2014 4:29 PM Flag

    That seems too good to be true. That would require that the government to have exercised some part of their common stock warrants That would be good for shareholders. The government would be in effect be signaling that Fannie Stock will be around for a long while.

  • There is abnormal selling with no foundation in the current news.
    This suggests a single or small group of sellers.
    There are few owners with the holdings to support this level of sales.
    You have Pershing and you have Fairholme.
    Based on GGP one can see that Fairholme is more risk averse.
    And Fairholme sold twice earlier this years -- per SEC filing. (This includes the sale to Ichan)

    This set of facts is consistent with the specultation that Fairholme is selling.
    I see no other selling group(s) aside from Ackman as having the shares need to account for the abnormal sales the last two days.


    I hope that both Pershing and Fairholme have not changed their position.
    Now what is the reality?
    Where are those shares being sold coming from?
    There seems to be no relevant public news to more traders in lock step.
    Why did Fairholme sell earlier this year?

  • tla_usa tla_usa Sep 3, 2014 3:41 PM Flag

    CDC Press Release - Sept 2, 2014----------
    CDC Director Tom Frieden “The window of opportunity to stop Ebola from spreading widely throughout Africa

    and becoming a global threat for years to come is closing, but it is not yet closed,”

    “If the world takes the immediate steps– which are direct requests from the front lines of the outbreak and the Presidents of each country – we can still turn this around.”88888888

  • A rebel group in Syria has obtained a laptop they claim belongs to ISIS.

    Excerpts from Foreign Policy 8-28-2014
    "The advantage of biological weapons is that they do not cost a lot of money, while the human casualties can be huge," the document states.

    The laptop also includes a 26-page fatwa, or Islamic ruling, ,,, "If Muslims cannot defeat the kafir [unbelievers] in a different way, it is permissible to use weapons of mass destruction," states the fatwa by Saudi jihadi cleric Nasir al-Fahd, "Even if it kills all of them and wipes them and their descendants off the face of the Earth."

    The documents also suggest that the laptop's owner was teaching himself about the use of biological weaponry, in preparation for a potential attack that would have shocked the world.

    One 19-page document found on the laptop explains in detail how to obtain and experiment with bubonic plague

    146 gigabytes of material, containing a total of 35,347 files

    "The real difficulty in all of these weapons ... [is] to actually have a workable distribution system that will kill a lot of people," said Magnus Ranstorp, research director of the Center for Asymmetric Threat Studies at the Swedish National Defence College. "But to produce quite scary weapons is certainly within [the Islamic State's] capabilities."

    The information on the laptop makes clear that its owner is a Tunisian national named Muhammed S. who joined ISIS in Syria and who studied chemistry and physics at two universities in Tunisia's northeast.

    The fear now is that men like Muhammed could be quietly working behind the front lines -- for instance, in the Islamic State-controlled University of Mosul or in some laboratory in the Syrian city of Raqqa, the group's de facto capital -- to develop chemical or biological weapons.

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