Whether or not a suit would be successful, I agree that this could be an area where management has invited risk which includes lawsuit. In my mind, that is why many companies prohibit conflicts of interest like this all together, even when they can be managed in an above the board fashion.
This risk and associated costs should be factored into the decision of whether or not shareholders of NWBO benefit financially from this arrangement with Advent. Sometimes the benefits of a suit are that they force transparency. I would not be surprised if this arrangement lands them in courts yet again, but I also would not be surprised to see the case dismissed or closed in management’s favor. To your point though, the appearance of potential concerns may put a drag on the stock price and cost the company resources in its defense.
In my ideal world, LP or any other insiders would have no interest in our partners business. Clearly the Cognate scenario negatively impacted the stock price and shareholder value even if the courts found no laws were broken. On the other hand, management didn’t have a whole lot of options available to them because of what happened to the stock price and shareholder value.
I still fall on the side of this being a largely non-issue, but you and Poorman helped me to understand that whether legal or not, the situation has risks that shouldn’t please shareholders. A lot, for me and how I finally judge management depends on the final outcome which is pending.
I don’t fault you for planning to cash in your chips at $5. While I believe the value of this IP could be as high as the lofty numbers people including me project, I do question whether or not this team has what it takes to get us there. Perhaps, the best scenario for you, me, and every other retail is a BO. Which is why I advocate for CRL to be that entity in a stock swap. Advent gives us leverage in that negotiation.
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