Friday, June 2, 2017

North, East, West, South (NEWS)

The parties participated in a mediation on April 25-26, 2017, in the Chicago area, with Mr. Jonathan Marks as mediator, to attempt to resolve at least some or all of the issues between them. The parties’ negotiations as to at least some of those issues are currently ongoing.

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nobody123789 said...

Still talking. Frankly, I would prefer to continue with the appeal. This would take substantially more time but the value of a Federal Circuit adjudication of the validity of GERS' patents would be far more significant than a settlement with 15 or so companies. The real prize is all the other infringing companies that are not currently defendants including some very deep pocketed ones such as Valero.

nobody123789 said...

if you think that nothing is going to happen then you are not thinking like Cantor Colburn (C&C).

“Next, Cantor Colburn LLP ("Cantor") and the Company entered into an amended agreement pursuant to which Cantor agreed to accept 15% of any recoveries from the Company’s pending patent litigation in excess of $3.6 million per year in exchange for all services rendered to date and moving forward. The Company recognized an $8,433,388 gain on extinguishment of debt upon the write-off of all accrued legal fees". GERS SEC 10Q filing for quarter ending March 31, 2016 filed May 19, 2016,

C&C is so certain of success upon appeal that they have exchanged more than $8 million in guaranteed fees for 15% of recovered damages (this would require damages to exceed $60 million [$8,433,388/0.15 + $3,600,000] just to break even). In fact that is clearly an extreme underestimate of the guaranteed fees that were exchanged for the 15% contingency fee since it includes both accrued fees and FUTURE fees as well. Now, if you know anything about C&C you will know that they will NOT gamble with this kind of money and are experienced enough to be certain of the outcome.

I am willing to bet that C&C see a much larger number that will make their 15% even more profitable. But lets play a game and assume $60 million is it, and that the OS count is 20 million (last announced was 14 million). If all the tea leaves are correct sometime in the foreseeable future we may read about a settlement worth (at least, probably significantly more than) $3 a share. Hard to believe a 2 cent stock will remain a 2 cent stock with that news.

Anonymous said...

I am a long time, suffering, shareholder. I would think that some money will be coming out of this mediation. The big question is, will the rug be pulled out from underneath the common shareholders? Will we see an increase in the share price? I am a little confused as I would have thought the price would start climbing pre-settlement time...

nobody123789 said...

No one is watching this; why would they?. Until there is a press release announcing how many dollars a share the settlement or appeal will generate -- expect no activity; only a slow oscillation of the PPS. At least there is no dumping post R/S as there has in the previous six (seven?). That is something to be positive about.

Anonymous said...

People are watching this, stop your lying.

nobody123789 said...

"lying" -- interesting word that portrays more about the user than the object. In this context the the present participle of "lie" means to be dishonest, mendacious, or untruthful. Unless I have inside information and was guilty of a SEC violation how could my assumption be construed in that way? Since it cannot, one must assume that you have an issue with GERS. That's OK many do.

Anonymous said...

I was referring to your comment of "No one is watching this; why would they?". People watch this was my point, but you are obviously too hung up on yourself and are not one to be corrected, obviously...

nobody123789 said...

April 4, 2017:
"Should the mediation prove unsuccessful, the parties will submit a briefing schedule for the Court’s approval by May 19, 2017."

June 2, 2017:
"The parties therefore request that all the deadlines in the above-captioned appeals continue to be stayed until June 16, 2017, at which time the parties propose that they will submit a Joint Status Report advising the Court as to the status of the pending motions and how they wish to proceed with the appeals."

1) C&C/KK are asking specifically for just two additional weeks instead of two months [They could have asked for any length of stay if they needed more time]
2) No briefing schedule was submitted by May 19, 2017 meaning all parties considered the mediation at that time to be by some measure productive [Considering the reputation of Jonathon Marks not surprising]
3) Note that the words "briefing schedule" were not in caps but "Joint Status Report" was. A briefing schedule was volunteered but required by the Court. A Joint Status Report is a formal court required construct, see for example [US Courts Rule 26(f)]
4) The Court will know if the appeals are proceeding on June 16th, which is now required to be communicated to the Court in a Joint Status Report; this is not optional. ["We" will know the evening of the 16th if the Skunk posts this on this blog from Pacer, or June 19th from the Clerk of the Federal Circuit Court].

Integrating all of this language (and other known facts) it is logical to conclude that we will know if a settlement has been reached or if the appeals will continue in 8 - 11 days. Based on 1) and 2) above I think that we are going to learn that there is a settlement. One would have to significantly misconstrue this language to conclude otherwise.

If there is a settlement this will NOT remain a 2 cent stock much longer. If there is a settlement C&C will surely have signed-off on the outcome. An analysis of what C&C forfeited to obtain a 15% contingency fee yields the inference that the settlement will translate into many dollars per share. As my sons used to say, "No way Jose" that GERS will remain any where near this PPS after that settlement is announced and broadcast in SEC filings and press releases.

If I am reading the tea leaves incorrectly and the settlement is not consummated and we are continuing with the appeal, then it is very likely that the PPS will languish for many months as the appeal plays out. However, sometime next year (I am guessing at timing not the outcome) the Federal Circuit Court will validate the patents. In my eyes this is the best outcome and worth waiting for as the prize (windfall) will be much greater as all the infringing companies, not just the current defendants, will likely be required to pay back royalties by this adjudication.

Anonymous said...

We know that the USPTO validated the patents, big question remains... Will the court agree?

nobody123789 said...

A little more reading would help. The USPTO reaffirmation is important and the Federal Circuit usually sides with the USPTO over the district court in these type of disputes -- "The UPSTO are the professionals". But that is not why the defendants all of a sudden want to settle. The reason: a recent Federal Circuit decision issued on July 11, 2016 (The Medicines Co. v. Hospira, Inc. 827 F.3d 1363 (Fed. Cir. 2016)). If the district court had followed the precedent of that case, it would not have found that the inventions defined in the claims at issue were on sale prior to the critical date. In other words, the appellate court (Federal Circuit) has already agreed with C&C/KK and in essence confirmed the validity of GERS' patents.

nobody123789 said...

The count down begins.

" ... until June 16, 2017, at which time the parties propose that they will submit a Joint Status Report advising the Court as to the status of the pending motions and how they wish to proceed with the appeals."

Seven days until we will know if there is a settlement or we continue with the appeals.

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