[U] The State AGs Move For An Additional $2.2 Million In Attorneys' Fees, From Martin Shkreli -- In His Daraprim® Antitrust Trial Loss.

Updated @ 5 PM EST -- The able Judge Cote has asked for any opposition to the general stay to be filed by the FTC/State AGs by March 14; and has given Martin until March 28 to answer on the attorneys' fees petition. If needed, there will be argument after that. But I expect this will be decided on the merits in the moving papers, alone. End update.

There are several developments this morning, on the Shkreli post-trial matters -- each worthy of mention.

First, the various state attorneys' general have compiled the bills racked up to prosecute Martin (by the taxpayers, at the moment) for his Daraprim^® schemes.

They will win an order for another $2.2 million from Mr. Shkreli. That is on top of the $64 million already owed.

Next, Martin has moved to stay collection of these amounts while he appeals the civil Daraprim^® loss. Because he knows he needs to post a bond to do so, he "offers" any shares in Phoenixus AG that aren't sold by the Receiver, Mr. Abbott, in the Koestler matter. [Here is that argument, from Duane Morris, such as it is.]

This is a fools' errand. It is highly unlikely that any shares will be left, and even if some were, there is essentially zero chance they would reasonably total $7 million (roughly 10 per cent of what he owes in the State AGs / FTC matter). That is so because the first $30 million the company Vyera/Phoenixus AG ever makes -- from now on -- must first go to pay the corporate settlement of the related FTC matter. The "free" cash flow (beyond the amounts owed to the government) from this stock is likely to be under $1 million per year, for the whole company -- so Martin's former 37% would only mean cash flow of around $370,000 pre tax -- or around $200,000 after tax.

There is zero chance that an asset which cash flows only $170,000 a year is worth more than say $2 million upfront (that's over fifteen times sales). It just isn't. And the able Judge Cote will so hold.

Consider that he owes Dr. Koestler nearly $6 million at this point, and probably less than $500,000 has been collected on that, so far. So, the shares of Phoenixus AG (overall) must be worth more than $24 million to make the math work for a bond.

They aren't.

And in any event, I'd expect that the Receiver will object to placing any lien ahead of the Koestler collection process. [Moreover, the FTC judgment orders that ALL his shares in any pharma company be sold off by 180 days from that order, in any event -- or about June 15, 2022.]

So -- Martin will need to find other cash, not only to pay his lawyers (directly on these appeals), but also to forestall the collection efforts, while he appeals.

I strongly suspect. . . he has none.

And that means. . . his appeal may never be filed. [Oh, and BTW -- he has filed a 31 page request that the overall FTC banning order / injunction be generally stayed... while he prosecutes his appeals. It too will fail, as he cannot make any showing, let alone a strong showing -- toward his chances for a win on appeal.]

Onward. . . grinning into the sunshine here.

नमस्ते