Even though it is in Chapter 11, the company still retains some liquid value — not that Martin will ever see a penny of it. And to be sure, this is a major achievement, to find a buyer at any price. Well done, Mr. Abbott.
You see, Martin still owes Thomas Koestler quite a bit over $5 million (which includes nearly seven years of post-judgment interest) — and this sale of 31% of Phoenixus AG will cover only about 18% of that debt. In sum, Martin personally will still be in the hole, to Dr. Koestler, the FTC (~$46 million)… and various others.
Here’s the latest — more shortly, as there are multiple filings this morning:
…After many months of discussion with multiple interested parties, the Receiver has identified a potential purchaser and agreed to what he believes to be the best possible sale terms for the Phoenixus Stock under Phoenixus’ current circumstances. Subject to the Court’s approval, the transaction would be consummated with Akkadian Partners SA, the management company of Akkadian Partners Fund – Compartment Phoenixus Investment (collectively, “Akkadian”) pursuant to terms reflected in the Stock Purchase Agreement filed herewith as Exhibit A (the “Akkadian Sale”). The Receiver’s determination that the Akkadian Sale is the best possible agreement available for the sale of the Phoenixus Stock is premised upon: (a) his expertise in and knowledge of similar financial transactions and the pharmaceutical industry; (b) his due diligence and efforts undertaken over the course of the past year to market the Phoenixus Stock and engage prospective purchasers; and (c) the economic realities currently facing Phoenixus. In the absence of the Akkadian Sale, it is the Receiver’s view that a sale of the Phoenixus Stock is not likely to be feasible. Although the proceeds of the Akkadian Sale will not be sufficient to satisfy the Judgment, it is the Receiver’s conclusion that it is the best course of action to realize a return on the Phoenixus Stock to reduce the balance of the Judgment.
The Receiver will continue to pursue other sources of recovery, including a possible tax return entitlement, the sale of stock owned by the Judgment Debtor in AudioEye Inc., and a sale of the Judgment Debtor’s Picasso etching….
In furtherance of his efforts to navigate the corporate laws of Switzerland where Phoenixus operates, the Receiver retained the service of Swiss counsel from the firm Baker McKenzie Zurich (“BMZ”). In accordance with the terms of the Receivership Order, the Receiver expects that he will submit the invoices from BMZ for approval by the Court once their services are completed in connection with the proposed Phoenixus transaction….
For the record, here is the proposed $1 million sale agreement (a 13 page .pdf). I am still reading it, but I note that it comes with a kicker for up to an added 20%, if the buyer is able to resell the shares within 10 years, at any profit from the $1 million original price.
Moreover, the buyer gets three seats on the Phoenixus AG board as it works its way through Chapter 11, here state-side. Now the parties must get the approval of the bankruptcy judge, to close this deal.
Makes sense. Kudos, to the Koestler team. It is a good start.
Onward — smiling.
Of course, 50 years ago, no one knew if longer term stays in space would be feasible.
