A summary of what I've learned (or already knew) after reviewing the posts by Rantes on the YMB:
1- Rantes is a pro Leronlimab CYDY shareholder who has obtained copies of various documents filed in CYDY's lawsuit against Amarex in the US District Court for the District of Maryland, in which CYDY sought and obtained a Mandatory Injunction (equitable relief) requiring Amarex to release data to CYDY, conditioned on CYDY posting a $6.5 million bond.
2- Reading these recent posts from Rantes and the cited language from filed documents can be confusing because Rantes doesn't always indicate when the docs were filed. But this lawsuit has been inactive since the bond was filed several months ago; so these are not recent filings. Nevertheless, they do contain many significant pieces of info that remain material to the ongoing dispute.
3- The Master Services Agreement (MSA) has a Limitation of Liability and Damages paragraph that precludes the recovery of consequential or special (punitive) damages under any circumstances. These would be the big ticket damages that could amount to hundreds of millions of dollars if adequately supported by admissible and probative evidence. As I interpret the subject paragraph, it would limit CYDYs damages to the the amounts previously paid or owed by CYDY for the disputed services plus its attorneys fees and costs. While the size of such a recovery would be beneficial to CYDY, it clearly would be only a small fraction of what consequential and punitive damages would potentially generate.Only the latter damages would materially move the goalposts financially.
4- My last post yesterday indicated that SA had likely carefully researched any viable means of rendering the limitation of liability unenforceable, and I posited the hope that case law might exist, under the controlling state law, holding the limitation of liability provisions unenforceable in the event of intentional or willful misconduct based on public policy grounds. The filing of CYDY's equitable lawsuit in federal court in Maryland likely indicates that Amarex is a Maryland corporation and its lawyers would likely have listed Maryland's laws as controlling any dispute under the MSA.
5- This afternoon I tried to do some legal research on my computer, attempting to find a Maryland case that would support the above theory. (Keep in mind that I retired at the end of 2001 from active practice, and although accepting an "of counsel" role at my firm since then, I have mainly just attended firm social functions for the last 10 years. I always did legal research in my firm's large library, never on a computer, and I am barely computer literate. So this effort was a shot in the dark that wouldn't even begin to compare with what SA would have done.) In any event, I found: Adloo vs H. T. Brown Real Estate Inc, 344 Md 254 ( Md Ct App 1996) which held that exculpatory contractual clauses, while generally enforceable under Maryland law, would not be enforced when the damages were caused by intentional misconduct or reckless, wanton, or gross negligence due to the adverse effect on the public interest of such conduct.
6- While Adloo dealt with contractual language that totally exculpated a party fro liability, its reasoning would also clearly apply to limiting liability and damages. Moreover, this particular holding from Adloo was cited with approval in a 2004 Maryland case, and is likely still good law in Maryland.
7- So all of this suggests to me that the nature of the allegations which SA has already made in its Distict Court filings, as cited by Rantes, give SA a reasonable basis to successfully argue in the Arbitration proceeding that the evidence of Amarex's misconduct should trigger the Adloo case exceptions to enforcing the the Limitation of Liability and Damages provision.
8- A reasonable likelihood of rendering the the limitation on consequential and punitive damages unenforceable in the Arbitration proceeding would have a huge impact on the dollar amounts in play during any arbitration settlement discussions. While this would be obvious, please bear in mind that a huge award in the Arbitration proceeding would only be as good as CYDY's ability to collect it. So the issue of whether the Amarex corporate veil could be pierced to reach NSF would still loom large in settlement discussions. Piercing the veil would likely take much more than simply showing that some NSF executive said he would look into the dispute. I have no idea how much evidence SA has on the issue of NSF's control of Amarex re the CYDY phase 3 HIV clinical trial and related BLA, but this potentially a very important issue.
I hope the above is useful to board members, but please don't anticipate responses to follow up questions. I'll be off the board for the next few days as I happily return my attention to college and pro football. GLTA.
1- Rantes is a pro Leronlimab CYDY shareholder who has obtained copies of various documents filed in CYDY's lawsuit against Amarex in the US District Court for the District of Maryland, in which CYDY sought and obtained a Mandatory Injunction (equitable relief) requiring Amarex to release data to CYDY, conditioned on CYDY posting a $6.5 million bond.
2- Reading these recent posts from Rantes and the cited language from filed documents can be confusing because Rantes doesn't always indicate when the docs were filed. But this lawsuit has been inactive since the bond was filed several months ago; so these are not recent filings. Nevertheless, they do contain many significant pieces of info that remain material to the ongoing dispute.
3- The Master Services Agreement (MSA) has a Limitation of Liability and Damages paragraph that precludes the recovery of consequential or special (punitive) damages under any circumstances. These would be the big ticket damages that could amount to hundreds of millions of dollars if adequately supported by admissible and probative evidence. As I interpret the subject paragraph, it would limit CYDYs damages to the the amounts previously paid or owed by CYDY for the disputed services plus its attorneys fees and costs. While the size of such a recovery would be beneficial to CYDY, it clearly would be only a small fraction of what consequential and punitive damages would potentially generate.Only the latter damages would materially move the goalposts financially.
4- My last post yesterday indicated that SA had likely carefully researched any viable means of rendering the limitation of liability unenforceable, and I posited the hope that case law might exist, under the controlling state law, holding the limitation of liability provisions unenforceable in the event of intentional or willful misconduct based on public policy grounds. The filing of CYDY's equitable lawsuit in federal court in Maryland likely indicates that Amarex is a Maryland corporation and its lawyers would likely have listed Maryland's laws as controlling any dispute under the MSA.
5- This afternoon I tried to do some legal research on my computer, attempting to find a Maryland case that would support the above theory. (Keep in mind that I retired at the end of 2001 from active practice, and although accepting an "of counsel" role at my firm since then, I have mainly just attended firm social functions for the last 10 years. I always did legal research in my firm's large library, never on a computer, and I am barely computer literate. So this effort was a shot in the dark that wouldn't even begin to compare with what SA would have done.) In any event, I found: Adloo vs H. T. Brown Real Estate Inc, 344 Md 254 ( Md Ct App 1996) which held that exculpatory contractual clauses, while generally enforceable under Maryland law, would not be enforced when the damages were caused by intentional misconduct or reckless, wanton, or gross negligence due to the adverse effect on the public interest of such conduct.
6- While Adloo dealt with contractual language that totally exculpated a party fro liability, its reasoning would also clearly apply to limiting liability and damages. Moreover, this particular holding from Adloo was cited with approval in a 2004 Maryland case, and is likely still good law in Maryland.
7- So all of this suggests to me that the nature of the allegations which SA has already made in its Distict Court filings, as cited by Rantes, give SA a reasonable basis to successfully argue in the Arbitration proceeding that the evidence of Amarex's misconduct should trigger the Adloo case exceptions to enforcing the the Limitation of Liability and Damages provision.
8- A reasonable likelihood of rendering the the limitation on consequential and punitive damages unenforceable in the Arbitration proceeding would have a huge impact on the dollar amounts in play during any arbitration settlement discussions. While this would be obvious, please bear in mind that a huge award in the Arbitration proceeding would only be as good as CYDY's ability to collect it. So the issue of whether the Amarex corporate veil could be pierced to reach NSF would still loom large in settlement discussions. Piercing the veil would likely take much more than simply showing that some NSF executive said he would look into the dispute. I have no idea how much evidence SA has on the issue of NSF's control of Amarex re the CYDY phase 3 HIV clinical trial and related BLA, but this potentially a very important issue.
I hope the above is useful to board members, but please don't anticipate responses to follow up questions. I'll be off the board for the next few days as I happily return my attention to college and pro football. GLTA.
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