Greetings Laertes,
Thanks for the valuable information. The 10 Q states:
"Significant out-of-pocket expenses for litigation will continue in the quarter ending December 1996. However, in October 1996, the Company and Immunex Corporation agreed to settle the Company's claims against Immunex and two of its former officers. The agreement provides payment of an aggregate of $21 million to the Company over five years (See PART II - OTHER INFORMATION, Item 1. Legal
Proceedings) starting with a payment of $11 million on November 15, 1996. Under an agreement with the attorneys which handled the litigation on behalf of the Company, additional contingent expenses of approximately $890,000 were accrued as liabilities on the September 30, 1996 balance sheet. The final amount of additional contingent expenses through November 1996 cannot yet be determined.
The attorneys will also be paid a percentage of the gross settlement amount. The net settlement payment amounts will be apportioned between the Company and the Institutions pursuant to an agreement under which the Institutions shared a portion of the litigation expenses. While the final amount cannot be determined at this time, it is estimated that the Company's share of the total settlement proceeds will range between $12 and $14 million."
This does confirm a contingency fee which appears to be above and beyond the substantial expenses. It is not clear if the Company's share of 12-14 million only takes into account the contingency fee and not the expenses. Additionally, it is not clear as to what is the division of the initial $11,000,000.00 payment. Being an attorney, I am well aware that lawyers try hard, (and usually succeed) in getting all their money first. It is still difficult to determine how much the lawyers's contingency is and how much is due the institutions. Assume for purposes of discussion that the lawyers were working on a one-third contingency plus expenses. Depending on how the contingency fee agreement was worded, it is possible that the lawyers could take one third of $21,000,000 which equals $7,000,000 plus the $890,000 out of the initial $11,000,000. Additionally it appears that there will be other expenses beyond the already incurred $890,000 along with payments due the institutions. It is not unreasonable to hypothesize that CIST could be left with less than $3,000,000 from the initial $11,000,000. And don't forget all the hours the Chief Executive Officer and possibly others, want to get compensated for.
Counterbalancing all this numbers hockus pockus is the excellent scientific and investment knowledge of Rick et. al. I'm still very interested, but haven't called my broker yet.
Peace,
Bob Cohen |
