Mr. Alonzo Could Earn $1.2 Million, For His Firm, For Selling Martin’s Phoenixus AG Interest, To Mr. Mulleady…

Alright — I promised more, about this filing from yesterday afternoon — and here it is. Yes, the end game is officially… on.

I ask you: what sense does it make, to pay a 5% commission (of perhaps as much as $1.2 to $2.5 million, for a couple months’ worth of work — at the outside), to this clearly very able court-appointed receiver (a fine former US Attorney in the same District where Martin was convicted of felonies, and sentenced, BTW — he handled the so-called “Wolf of Wall Street” / Belfort testimony)… when no matter what happens now, Martin WILL lose control? Answer: No sense, at all.

The 5% commission will be purely extra costs, in the transaction(s) — nominally payable out of Martin’s shares, simply because he won’t accept… the inevitable.

The shareholders who voted about ten days ago, as a part of Martin’s 70 per cent block, ought to just cut a deal, directly with Mulleady — and do it all by a settlement agreement. That way, the other shareholders of Phoenixus AG preserve more value in the company, overall — and likely can work out a governance arrangement with the Mulleady team, that essentially ends Martin’s role… all while keeping the company as a going concern for those same shareholders.

The OTHER (forced) route — via the cram down / Daniel R. Alonzo / receiver — is that Mulleady gets the shares anyway, but millions of dollars are wasted, fighting this receiver process — and the company may well be bankrupted — before the other shareholders are able to sell THEIR own stakes.

Either way, the time of Martin running it all, from Allenwood Low… is coming to a rather swift end.

The question is: why would the other shareholders waste their money — into the millions of dollars… trying to prevent the… inevitable?

Martin’s view cannot be executed, any longer, now — so better to strike a deal and salvage what is left of the value in the company, for themselves.

Forget Martin — he’d long ago become a burnt offering in this process (by his own unenlightened decision-making).

Onward, grinning — ever… grinning. Great night under the stars, with Dvořák‘s “New World” / Ninth Symphony — last night, in the park.

The Able Judge Just Gave The Parties To July 27, To Finalize Receiver Mechanics; And Named A Receiver.

This is likely going to be a busy week ahead (and perhaps, weekend now, too!), for the removal of Martin’s voting interests in Phoenixus AG.

[As a separate matter, Ms. Murphy has been ordered to place the receiver’s CV in the public record by Tuesday. She is in very hot water, now with Judge Nathan. I won’t reprint that order, to avoid embarrassing her, unduly.]

Here’s the main order, tonight:

ORDER:

The Court has reviewed the parties’ submissions on the appointment of a receiver and the form of an appointment order. The Court will appoint Daniel R. Alonso as a receiver.

The Court has no doubt that both individuals proposed by the parties could ably discharge the duties of a receiver in this case and would act with integrity and without bias. However, because Mr. Koestler’s proposed receiver, Sundar Kodiyalam, has a prior relationship with Mr.Koestler, the Court is inclined to appoint Mr. Alonso to avoid any appearance of favoritism.

Mr. Alonso’s long history as an officer of the court and experience as a receiver qualifies him to perform this role even though he lacks transactional experience in the pharmaceutical industry. The Court agrees with Mr. Koestler on the substantive terms of the appointment order, including authorization for the receiver to retain counsel as needed and the fee structure proposed. It is the Court’s view that the fee structure in Mr. Koestler’s proposed order, with the receiver to receive a commission up to 5% of the amounts disbursed upon further application to the Court without a predetermined hourly fee or retainer, best aligns the receiver’s incentives with the purpose of the receivership and comports with N.Y. C.P.L.R. § 5228. The parties shall confer in good faith on a proposed receivership order consistent with this order and shall submit a proposed order by July 27, 2021.

SO ORDERED. (Signed by Judge Alison J. Nathan on 7/23/2021) 

This whole matter in Manhattan… is about to blow Martin off the page, completely.

Stay tuned.

Ms. Murphy Supposedly Voted Martin’s Phoenixus AG Shares. Also, Reportedly His Sister Holds A Power Over Them: Akeel Mithani’s Sworn Subpoena Responses.

There is more here — a lot more.

And you should read Dr. Koestler’s eight page lawyer’s letter, in full. All of this was filed a few hours ago. I will return to this letter, this weekend.

But here is a particularly interesting bit, from one of the exhibits, to the letter:

“…To the best of my knowledge, Mr. Shkreli’s attorney, Brianne Murphy, held a power of attorney that was used to vote his shares in Phoenixus AG. I believe that Mr. Shkreli’s sister, Irene Leonara, also held some form of power of attorney….”

In a non-contested situation (routine annual meeting, for example), it is zero problem for one’s attorney to vote one’s shares — even in a change of control setting. [Assuming all agree to the change of control.]

However, under both New York state and federal bar rules, it is entirely another matter — to serve as trial counsel in a proceeding in which a receiver is being appointed for those shares, and a court order exists for the turnover of those shares… (in the matter you, as attorney are acting for Mr. Shkreli) all while acting (arguably to thwart that same court’s order) — by power of attorney, to put distance between those shares, and the beneficiary of that order. Recall that it is at least claimed that Mr. Mulleady is now in contractual privity with Dr. Koestler, to obtain some or all of the receivers’ shares / interests.

This one may blow up in Ms. Murphy’s face — just as the Retrophin deals… blew up in Evan Greebel’s face.

As an officer of the court (and well aware of binding court orders in this matter), she cannot affirmatively act to thwart court orders (other than to move to appeal or reconsider, in the courtroom, proper). Full stop.

It would have been much wiser for Martin’s sister to have voted those shares — all assuming Akeel Mithani is not… misinformed.

Wow. Do stay tuned.

Okay –This Is Interesting: Elizabeth Holmes Related.

It turns out that the government is also investigating others — a third party company / companies — as a result of things it learned in the Holmes prosecution. These investigations are also apparently beyond civil — and will allege crimes were committed (see the middle paragraph quoted in blue below).

These investigations may result in some evidence being introduced at Holmes’ trial that the targets of that investigation are not yet privy to. Maybe even to learning for the first time that certain individuals at the unnamed third party company (also likely a human-health related company, but definitely a Bay Area company) will be arrested, after forthcoming indictments are unsealed.

So there may yet be more juicy dividends, for this blog — in Billy’s having encouraged us to look in closely on the Holmes matters. Sweet. Here’s the text, from a stipulation — just filed this afternoon in San Jose:

During the pendency of this case, the government conducted a separate investigation into an unrelated Bay Area company. That unrelated Bay Area company previously employed an individual who may testify in the trial of this case. During the government’s investigation of that unrelated company, the government obtained documents relevant to that company’s employment of the witness in this case, including documents created by or referencing that individual (hereinafter, “Separate Investigation Materials”). Defendant Holmes has requested that the government produce certain categories of Separate Investigation Materials in this matter. The government does not concede that such materials are discoverable or admissible at trial, but is preparing a document production in response to Defendant’s request.


These Separate Investigation Materials contain several categories of nonpublic information, including confidential corporate information, trade secrets, Protected Health Information (PHI, as defined in HIPAA), or other information protected by certain privileges and doctrines, such as work product and attorney-client privilege. These materials also disclose details regarding the above referenced unrelated government investigation, including details that are not known by the public or the now-charged targets of that investigation, who have not yet been arrested and arraigned.

Disclosure of that information could adversely affect the ongoing unrelated investigation. Finally, the Separate Investigation Materials consist of information unrelated to Defendants in this case or Theranos generally. The Original Protective Order provides procedures to facilitate the production of Private Documents, as that term is defined in the Order.

I’ll admit I have not read all the WSJ reporting on the Holmes tangents and tendrils, but to my knowledge, no MSM outlet has named the third party company. Even so, it should be pretty easy to figure out which company it is, by looking at the wending path of the case, over the past three years.

I’ll leave the MSM… to that task.

Onward, smiling….

[U: Originally Posted June 22, 2021.] Trivia / Numerology! Yesterday Evening, And August Through December…

Okay. . . Ready?

Okay — think about what you were doing — at exactly 9:21 pm — twenty-one seconds into that minute, precisely. . . last night. It was a 21st second, of a 21st minute, of a 21st hour, of the 21st year, of the 21st Century (as measured by the Gregorian calendar, at least).

The sixth (month) is. . . an odd ball — I freely admit. [But it does put it as the solid middle of the year of 21s.]

And there will be no 21st month, to be sure. . . .

But see if you can arrange to do exactly the same thing (assuming it was pleasurable), on this corresponding day of the ensuing months, from July August to December. Grin. . . [and if it was not pleasurable, just. . . switch it up].

And, apropos of nothing, really — this at above right, from the NY Met, is a 3,100-plus year old pair of lips, and a jaw-line remnant / sculpture — likely of an Egyptian Queen (Tiya, Nefertiti or Kiya are all strong possibilities). Or royalty. . . at least. Enjoy. . . grinning, here. Will mention it again — in 30, 60, 90 and 120 days.

[There will be some minor discovery news tomorrow — on Express Scripts providing evidence to BCBS, from the FTC Daraprim case.]

नमस्ते

[Redacted.]

Clearly, The Settlement Discussions Are Progressing — Without Martin — On The FTC and BC/BS Daraprim® Cases…

While I was off-grid today (in a verdant, hazy sunshine warmed ravine system, swarming with indigenous hummingbirds), this order was entered in both federal cases, in Manhattan. Clearly the settlement discussions are progressing:

...[Further] Settlement Conference set for 8/26/2021 at 9:30 AM before Magistrate Judge Robert W. Lehrburger….

Martin will be — as we’ve long said — left, high and dry by the corporate defendants. Mr. Mulleady may well be so, as well — thus my header.

Onward, grinning…. ever, grinning.

Virgil Griffith’s Remand Order Is Now On File…

And it is… a humdinger, from the able USDC Judge Castel, in Manhattan, thus:

Though defendant is a bright well-educated man, his method of circumvention of the Order was neither clever nor effective. He claims that he used his mother to “act as an assistant to access the Internet on his behalf. . . .” (Doc 121 at 4.)

The electronic message he sent through his mother was written in the first person claiming that his lawyers told him “it is permitted for me to access my cryptocurrency on [c]oinbase . . . I’m going to need the 2FA [two-factor authentication] removed as the FBI took my devices away.”

While his lawyer was willing to say that she saw no issue in his “using this secretarial arrangement” for some purposes, she never went so far as to claim that she told her client that “it is permitted for me to access my cryptocurrency on [c]oinbase. . . .”

The Court finds by a preponderance of the evidence that there are no conditions or combination of conditions that can reasonably assure defendant’s presence at trial. He is remanded to the custody of the U.S. Marshal pending trial.

SO ORDERED….

Now you know — hiking next. Grinning; ever grinning.

Young Virgil Griffith Is… Now Jailed, Awaiting Trial In September 2021 — He Could Get 20 Years…

His bragging is what likely sealed it. He apparently told LA hotel clerks that “in America they’ll let you do anything… once.” He said they’d read about him in the papers. Now, they will.

Here is the live reporting, from the able, and irrepressible Inner City Press — as I was unexpectedly waylaid, by client work today:

AUSA: He’s told “no”, then tries to circumvent. He’s an expert in the Dark Web, and searching it. On Aug 7, 2019 he said,the Americans let you get away with it once.

[Virgil’s lawyer]: Dissidents use the Dark Web. He has PhD, he could do this. Doctor Evil does this with a burner from Starbucks, not through his mother. [Condor’s observation: the things he did… his felony bail order expressly forbid him from doing. Living on a river, with vast wealth, he could buy a fast boat, and be well-hidden in the Caribbean (or far beyond it) in a few days. Think John McAfee here. End of story.]

Judge Castel: He’s charged in a single IEEPA count. Trial is near. The circumstances have changed. Ether has gone up by ten times. It changes the calculus. Bond Paragraph 14 was violated. 

Judge Castel: My concern is risk of flight. The defendant is remanded.

Now you know — no more languid afternoons, sipping lemonade, or iced tea on the wrap around porch, at his parents’ mansion by the river — outside bucolic Tuscaloosa, Alabama, for him.

He’ll be held in the same deplorable pre-trial conditions that Martin Shkreli faced, while awaiting a final sentence, in the NYC MCC.

It is, by all accounts, a fetid hell-hole. But he only needs to last there two and a half months or so — to trial. Then it will likely be a low security federal facility on the East Coast, for perhaps seven to ten years.

Onward, to more likely red ink on Riot stock prices tomorrow. Grinning… ever grinning.