you are absolutely correct with the comment below:
"I do not think HJOE will request settlement either, however a mediator will push for it. What I don't agree with is the clear cut part. Once at trial the facts as the parties know them will be argued in front of a jury and regardless of what we think is right, there is no guarantee that Joe wins. We know KBM is a bad actor in this, but what we don't know are all of the minute details of the case and the devil is in the details. It may be a worthy fight but it is still risky as there is no guaranteed win. That's just the reality of trials."
summary judgment is also whimsical at best. unfortunately - i have first hand experience of this in court myself. once in a courtroom - nothing is cut and dried, rational, or concrete.
by forcing a settlement, i was referring to mediation with a strong statement from the judge to one or both parties that he/she REALLY does not want this case in their courtroom (with reasons for not wanting) and strongly urging them to settle. i agree that (at least on surface), KBM does not want this to go to trial. all they have is the contract and terms within and the argument that HJOE took the money and doesnt want to abide. HJOE has their prior bad acts, has them coming into the contract with unclean hands, has them NOT being a conducive partner as they alluded to, and operating well outside of good faith. hopefully, a judge would be very specific with KBM on these points during the pre-trial arguments and strongly encourage KBM to the table. this also assumes that HJOE has tried to reason/negotiate with them prior to this going to trial. the judge can not force them to settle per se but they can make it known that one party or the other is going to be prejudiced going forward if they continue.
i have seen others use the argument that HJOE knew these guys were bad actors and thus they themselves must be as well if they did business with them. the reason there are usury laws is to prevent desperate debtors from being taken advantage of or abused by the process when they are trying to keep things together. when the contract is removed and one looks rationally at the process - how is working completely against teh company you are lending money to (by aggressively shorting/selling its stock and taking its legs out from underneath them) NOT breaching the good faith agreement that you are lending them money to help them succeed (like a normal bank would)...? with the trove of historical instances where KBM and others like them have systematically put companies out of business/destroyed shareholders - it isnt a stretch for HJOE to argue such.
another compelling facet is the founders complete lack of experience with public companies/toxic lenders. one can argue Veal was experienced in such but he was brought in after the fact when the loans went toxic and traditional funding refused to participate (didnt help the massive lending crunch at the time). therefore - it is take the toxic debt or fold the tent up and go home.
since none of the founders/key mgmt are fleecing the company with exorbitant salaries/bonuses/stock options that arent aligned with shareholder performance, KBM can not argue that they were enriching themselves and then crying foul.
so - when a judge looks at the total return by KBM, the initial loan, any prior attempts to settle by HJOE, and the past history of KBM lending - he may make it clear to their attorneys that he considers them to be undamaged and to have made a sizeable return (relative to usury). that warning would/should give their attorneys pause in being aggressive in going to trial or coming to the mediation with a more rational offer. also, if HJOE appears hostile towards a settlement in the pre trial hearing, the judge may also give them the same expectations that they head into the mediation with an open mind to come to an agreeement.
"I do not think HJOE will request settlement either, however a mediator will push for it. What I don't agree with is the clear cut part. Once at trial the facts as the parties know them will be argued in front of a jury and regardless of what we think is right, there is no guarantee that Joe wins. We know KBM is a bad actor in this, but what we don't know are all of the minute details of the case and the devil is in the details. It may be a worthy fight but it is still risky as there is no guaranteed win. That's just the reality of trials."
summary judgment is also whimsical at best. unfortunately - i have first hand experience of this in court myself. once in a courtroom - nothing is cut and dried, rational, or concrete.
by forcing a settlement, i was referring to mediation with a strong statement from the judge to one or both parties that he/she REALLY does not want this case in their courtroom (with reasons for not wanting) and strongly urging them to settle. i agree that (at least on surface), KBM does not want this to go to trial. all they have is the contract and terms within and the argument that HJOE took the money and doesnt want to abide. HJOE has their prior bad acts, has them coming into the contract with unclean hands, has them NOT being a conducive partner as they alluded to, and operating well outside of good faith. hopefully, a judge would be very specific with KBM on these points during the pre-trial arguments and strongly encourage KBM to the table. this also assumes that HJOE has tried to reason/negotiate with them prior to this going to trial. the judge can not force them to settle per se but they can make it known that one party or the other is going to be prejudiced going forward if they continue.
i have seen others use the argument that HJOE knew these guys were bad actors and thus they themselves must be as well if they did business with them. the reason there are usury laws is to prevent desperate debtors from being taken advantage of or abused by the process when they are trying to keep things together. when the contract is removed and one looks rationally at the process - how is working completely against teh company you are lending money to (by aggressively shorting/selling its stock and taking its legs out from underneath them) NOT breaching the good faith agreement that you are lending them money to help them succeed (like a normal bank would)...? with the trove of historical instances where KBM and others like them have systematically put companies out of business/destroyed shareholders - it isnt a stretch for HJOE to argue such.
another compelling facet is the founders complete lack of experience with public companies/toxic lenders. one can argue Veal was experienced in such but he was brought in after the fact when the loans went toxic and traditional funding refused to participate (didnt help the massive lending crunch at the time). therefore - it is take the toxic debt or fold the tent up and go home.
since none of the founders/key mgmt are fleecing the company with exorbitant salaries/bonuses/stock options that arent aligned with shareholder performance, KBM can not argue that they were enriching themselves and then crying foul.
so - when a judge looks at the total return by KBM, the initial loan, any prior attempts to settle by HJOE, and the past history of KBM lending - he may make it clear to their attorneys that he considers them to be undamaged and to have made a sizeable return (relative to usury). that warning would/should give their attorneys pause in being aggressive in going to trial or coming to the mediation with a more rational offer. also, if HJOE appears hostile towards a settlement in the pre trial hearing, the judge may also give them the same expectations that they head into the mediation with an open mind to come to an agreeement.
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