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Pending lawsuit with GSK & Sale of Company

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anonymous

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There is only one reason we have not been sold yet. There is a pending lawsuit with GSK that will be decided late summer early fall. The potential acquirers are waiting for that. It makes no sense to buy us now when there is uncertainty regarding the value of the company. No BD guy ever got fired for the deal they DIDNT do...so they're waiting. If the result is in our favor (likely) it will result in an influx of capital and our value will be higher, if not the value will be lower. As soon as there is ruling, we 'll be gone in a month.
 




The above post sounds like it is from management or legal trying to calm the other nonsense false posts on this board.

Can someone confirm the above who knows how to research and find court documents. Most lawsuits are not something you find by simply googling.

This thread does make sense as to why so many institutional funds are holding ownership shares. I would not discount this thread as being false right off the bat without looking into this lawsuit.
 




I THINK the lawsuit is about Pernix raising the price of Treximet when purchased from GSK while all the MCO contracts were with GSK. When you take price increases it affects managed care contracts. Pernix raised the price and stuck GSK with the penalties.
 




anonymous said:
I THINK the lawsuit is about Pernix raising the price of Treximet when purchased from GSK while all the MCO contracts were with GSK. When you take price increases it affects managed care contracts. Pernix raised the price and stuck GSK with the penalties.
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How in the world could this help Pernix in any way? Only seems like an outcome that would potentially make things worse for Pernix based on your reply
 




In December 2014, GlaxoSmithKline asserted a claim against Pernix for damages arising from an alleged breach by Pernix of Section 8.15 of the Asset Purchase Agreement between the parties. GSK has alleged approximately $32 million of additional damages. Pernix has asserted a setoff under the Asset Purchase Agreement, as well as its own claims for GSK's alleged breach of a Supply Agreement between the parties, amounting to in excess of $50 million. Pernix and GSK have entered into an Interim Settlement Agreement under which Pernix has paid GSK an amount equal to 35.7% and deposited into an escrow account an additional 21.4% of the amount GSK claims are owed as rebates on Caremark business. On August 24, 2015, the parties submitted this matter to binding arbitration before the International Chamber of Commerce International Court of Arbitration. Discovery in the matter has begun and hearings are scheduled for April and August 2016. A decision in the arbitration is expected in September or October 2016.
 




The Company has paid to GSK approximately $10.3 million through March 31, 2016 and has deposited an additional approximately $6.2 million into an escrow account on account of the settlement of disputed amounts. The amounts paid by the Company to GSK and escrowed represent approximately 57% of the amounts GSK claims are owed to them as a result of the Company's alleged breach. The amounts paid and escrowed by the Company for GSK claims are consistent with the amounts accrued by the Company for managed care rebates and fees during the three months ended March 31, 2016 and 2015. An arbitration hearing was held in April 2016 and a second hearing is scheduled for August 2016. A decision by the arbitrators is expected in October 2016.
 








So....If they lose, they already paid over half of what GSK demands and will have to fork over around $15mil more to GSK. If Pernix wins, they should get back those payments, plus the counterclaims against GSK for breach of supply agreement in excess of $50mil....so Pernix victory = ~ $76million payment from GSK to Pernix.
 




This makes perfect sense as to why potential buyers of Pernix must wait until resolution of this lawsuit as it clearly would effect the purchase sale price of the company - as the original poster stated. So by late October, early November we should know the official outcome.
 




Actually the company looks more attrative now since it already covered over half of what GSK is asking for and could get it back if they win. Company is cheaper to buy now before GSK has to pay them +$70mil. So buy ptx asap and get bonus 70 million in couple months to help cover the BO costs. based on latest filings the company is already worth at least $6/share...up to $14/share if you account for possible future revenues. Tender offer could come in coming weeks
 




anonymous said:
Actually the company looks more attrative now since it already covered over half of what GSK is asking for and could get it back if they win. Company is cheaper to buy now before GSK has to pay them +$70mil. So buy ptx asap and get bonus 70 million in couple months to help cover the BO costs. based on latest filings the company is already worth at least $6/share...up to $14/share if you account for possible future revenues. Tender offer could come in coming weeks
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Sad Stocktwit math. To me it reads more like ptx is going to have to pay gsk another 5 to 15 million.
 
















We need not get derailed from the original poster statement that potential buyers cannot accurately value Pernix without knowing the outcome of this lawsuit in October.

The statement that no business development director ever got fired for the deal he didn't make is indeed how mergers + acquisitions come about.
 




anonymous said:
We need not get derailed from the original poster statement that potential buyers cannot accurately value Pernix without knowing the outcome of this lawsuit in October.

The statement that no business development director ever got fired for the deal he didn't make is indeed how mergers + acquisitions come about.
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That's not true either desperate twit. It's small potatoes to the debt and falling revenue.

And to top it off Steven Elms, the guy on the board of directors, works for one of the companies that owns the 12% debt that is bankrupting pernix. And even worse, Konidaris works for another.
 




It is common for large debt owners to have a seat on the Board of Directors. They look out for their own company interests in protecting their investments. This is common and not a cause to alarm people on a message board thread that is trying to factual be serious (compared to other threads on the Pernix message board these days)

Bond holders do get to the front of the line in getting repaid should a company go bankrupt. Where common shareholders usually get wiped out). However, it is never a good thing for bond holders when a company goes bankrupt. And most debt holders will try and reifinance the debt as a first step in helping a company's turnaround. Or in Pernix case, a buyout.

So again it makes perfect business sense for a potential buyer pf PTX to wait until October when the courts rule on a decision as to what value they (or others) will pay for Pernix. As the company does in fact have strong patented (and in some cases, patented protected) products of interest and future potential.

Name calling people on this message board does not change any of these facts and issues.
 




anonymous said:
It is common for large debt owners to have a seat on the Board of Directors. They look out for their own company interests in protecting their investments. This is common and not a cause to alarm people on a message board thread that is trying to factual be serious (compared to other threads on the Pernix message board these days)

Bond holders do get to the front of the line in getting repaid should a company go bankrupt. Where common shareholders usually get wiped out). However, it is never a good thing for bond holders when a company goes bankrupt. And most debt holders will try and reifinance the debt as a first step in helping a company's turnaround. Or in Pernix case, a buyout.

So again it makes perfect business sense for a potential buyer pf PTX to wait until October when the courts rule on a decision as to what value they (or others) will pay for Pernix. As the company does in fact have strong patented (and in some cases, patented protected) products of interest and future potential.

Name calling people on this message board does not change any of these facts and issues.
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Interesting, wouldn't you agree that it is a cause of concern for investors and employees that have hard earned options, stock and time invested in company that the only 2 board members represent the bond holders?

I don't know, if I worked there and found out I had been scammed I would feel pretty angry, wouldn't you?
 




You motive is that you want to scare employees and investors/owners based on your own anger and frustration (whatever that may be).

The fact is the having Board members representing the debt holders is a good thing here. They are in position to broker a refinance of debt if needed. I say if needed, because you are trying to derail the original poster's thread which is the lawsuit and the logical reasoning that potential buyers will indeed wait a few months until October for a ruling before making offers for very good assets Pernix has (which includes some patented protected products and also some key performing operational and sales employees).
 




Nobody (in general public) knows who the 12% note holders are. The sale was a restricted, unregistered private equity offering under rule 144a outside of SEC regulations. Only qualified institutional buyers can even inquire about purchasing. The notes are secured by the company's assets/interests in Treximet. If you contact the trustee (U.S. Bank), they can't share that info with anyone per a confidentiality agreement under section 7.11 of the original Indenture...


SECTION 7.11.
Confidential Information
. The Trustee, in its individual capacity and as Trustee, agrees and acknowledges that all information provided to the Trustee by the Issuer or any Subsidiary (or any direct or indirect equityholder of the Issuer or such Subsidiary) or any Holder (or holder of a beneficial interest in the Securities) may be considered to be proprietary and confidential information. The Trustee agrees to take reasonable precautions to keep such information confidential, which precautions
shall be no less stringent than those that the Trustee employs to protect its own confidential information. The Trustee shall not disclose to any third party other than as set forth herein, and shall not use for any purpose other than the exercise of the Trustee’s rights and the performance of its obligations under this Indenture, any such information without the prior written consent of the Issuer or such Holder (or such holder of a beneficial interest in the Securities), as applicable. The Trustee shall limit access to such information received hereunder to (a) its directors, officers, managers and employees and (b) its legal advisors, to each of whom disclosure of such information is necessary for the purposes described above; provided, however, that in each case such party has expressly agreed to maintain such information in confidence under terms and conditions substantially identical to the terms of thiSection 7.11.
 




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