Replies to post #111118 on NorthWest Biotherapeutics Inc (NWBO)

[biosectinvestor]

It may be settled to resolve it, but if it were taken to trial, I doubt Yonemura would be resolved in favor of the plaintiff. The Business Judgment rule and a whole slew of other reasons would make that case very unlikely to be resolved in the plaintiff's favor, and without the other case, which alleged all sorts of conflicts of interest and collusion, which appears to not have been proven, I think Yonemura would have failed, right out of the gate.

They are not entirely disconnected, because one case provides the justification for the other being made, in truth, if not by admission. Fundamentally, the allegations of the other case, of bad actions, conflicts of interest, etc., are also the justification for the same allegations in Yonemura. But it will resolve differently because they do not technically base their claims upon one another and the Yonemura complaint, in my opinion, is more carefully and tightly drafted. That they are resolving it, if it's a reasonable resolution, is a good thing.

[Pablosrv]

The settlement will most likely involve LP/Cognate returning some of her profits to NWBO, though I doubt any cash flows.

Wow, that sentence just reveals how ignorant you can be.

[CherryTree1]

Yes understand, but when you allege:

In Yonemura, NWBO (via owners) are suing Cognate and LP for damages from alleged self dealing. They are asking money to be returned to NWBO from Cognate. Even if the events in play are the same, the nature of the lawsuits are very different. And that is why one is dismissed and the other is being settled. The settlement will most likely involve LP/Cognate returning some of her profits to NWBO, though I doubt any cash flows.

Not seeing that at all. That is why I included this statement from the ruling in the other case:

Finally, Plaintiffs unsuccessfully attempt to raise a "strong inference of scienter" based upon Defendants' "unique financial motive to inflate NW Bio's stock price." Specifically, they allege that "NW Bio operated as a fiefdom for the personal benefit of Powers," and "ecause the lavish benefits that NW Bio conferred upon Cognate, Powers, and her Toucan Group of companies far exceeded the Company's assets, NW Bio had to repeatedly tap the public markets." Even if that were true, it does not follow that "defendant acted with the required state of mind" to defraud investors. "A strong inference of fraud does not arise merely from seeking capital to support a risky venture. Indeed, the motivations to raise capital or increase one's own compensation are common to every company and thus add little to an inference of fraud." That Defendants may have wished to raise capital for other business ventures does not, on its own, establish fraudulent intent.

To conclude, it bears noting that:

All investments carry risk, particularly in a field like biopharmaceuticals. If we inferred scienter from every bullish statement by a pharmaceutical company that was trying to raise funds, we would choke off the lifeblood of innovation in medicine by fueling frivolous litigation — exactly what Congress sought to avoid by enacting the PSLRA.

It is more likely they will find the same in the Yonemura case. Case dismissed with assessed damages = $0

[sentiment_stocks]

I agree ex. Yonemura primarily deals with LP and the MFN clause. There is really no mention of Adam or Buzdar or P5 in these other two cases.

Perhaps those arguing for the Yonemura and the Tharp/Henkel cases think they played some sort of role in LP doing away with that MFN clause, and feel then that they are entitled to having at least their fees covered. Whether we'll see any money returned to NWBO is doubtful, but I guess possible. I'll be honest, I doubt the lawyers are arguing for that to be the case at all, but we'll see.

We all know that the reason the MFN clause was removed was to stay on NASDAQ and really had nothing to do with the lawsuit. But I'm sure a persistent lawyer for these cases would argue otherwise.

Therefore, in the interests of putting these lawsuits behind them, the company would most likely simply use their insurance to cover the legal fees of those lawyers, and be done with them.