Kudos to CYDY management for not tying Sidley's hands in the Amarex negotiations. We shareholders were hoping to learn of a favorable settlement in this lawsuit to obtain return of clinical trial patient data. But the court was informed yesterday that the settlement talks had failed. Counterintuitively, this may be good news.

The talks would likely have involved not only return of the data, but also Amarex's demands re unpaid invoices and possibly CYDY's potential claims for compensation re alleged contract breaches and/or tortious misconduct by Amarex. Given the issues at hand in the Nov 24 shareholder meeting, and the obvious desire of CYDY management to issue a PR before the meeting announcing return of the patient data, it is reassuring that management (the client) did not instruct Sidley to accept any settlement terms that would have included return of the data regardless of other provisions.

The provisions of any settlement are all about leverage, and who has it. It strikes me that Amarex's position on the mandated return of the patient data is untenable, but its lawyers may well have sought generous concessions from CYDY based (leveraged) on management's current public relations vulnerabilities. While all of this is speculation on my part, it also makes sense.

By walking away now, and hopefully soon obtaining an Order mandating return of the data, CYDY will have increased its negotiating credibility and will carry more leverage into future negotiations. It's also possible that certain BP companies will likewise take notice.