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Post by mydogskip on Jul 25, 2016 14:27:43 GMT -5
So how many billions does SNY owe MNKD? Probably zero. Unless the contract specifically says that Sanofi is liable for consequential damages, then they aren't on the hook even if MNKD could prove the losses (which are purely theoretical and speculative). Regarding Sanofi, their lawyers are probably advising them to do nothing at all. True, the money invested is a sunk cost and has probably been written down to zero on their books, but they do have Valencia as security for the debt. If Sanofi is looking at the MNKD balance sheet and thinking that bankruptcy is inevitable, there is no reason not to wait and then take the asset to recover some of their investment. Since the asset is secured, a liquidation of the building would happen outside of the bankruptcy proceedings and would not be subject to objections by other creditors. From a PR perspective, this would be fairly clean since secured creditors moving to liquidate the underlying assets are considered routine actions and don't attract much press. Will it come to that? Lets hope not, but with the debt not maturing for ten years and binding arbitration required under the contract, Sanofi won't be in a hurry to do much of anything. I agree. Nothing has happened yet and odds are nothing will happen. The contract with Sanofi made it clear that Mannkind would not see any payment unless Sanofi didn't abide by the contract. Sanofi did. Sanofi has been probably telling Matt to go pound sand. But who knows. Maybe Mannkind has better lawyers than they do C level executives.
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Post by jurystillout on Jul 25, 2016 14:29:34 GMT -5
Sanofi has a $60 million lien against the facility in Valencia. Correction : Sanofi has a 60 Million dollar loan to Mannkind at a Rate of 8.5%, the collateral against this loan is everything owned by Mannkind including patents, property, inventory... Mannkind defaults on this loan Sanofi is the new owner of everything Mannkind. Shareholders get absolutely nothing!
Sanofi is not going to forgive anything, they're hoping for a default. Almost seems like they planned it this way huh!
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Post by Deleted on Jul 25, 2016 14:51:35 GMT -5
Probably zero. Unless the contract specifically says that Sanofi is liable for consequential damages, then they aren't on the hook even if MNKD could prove the losses (which are purely theoretical and speculative). Regarding Sanofi, their lawyers are probably advising them to do nothing at all. True, the money invested is a sunk cost and has probably been written down to zero on their books, but they do have Valencia as security for the debt. If Sanofi is looking at the MNKD balance sheet and thinking that bankruptcy is inevitable, there is no reason not to wait and then take the asset to recover some of their investment. Since the asset is secured, a liquidation of the building would happen outside of the bankruptcy proceedings and would not be subject to objections by other creditors. From a PR perspective, this would be fairly clean since secured creditors moving to liquidate the underlying assets are considered routine actions and don't attract much press. Will it come to that? Lets hope not, but with the debt not maturing for ten years and binding arbitration required under the contract, Sanofi won't be in a hurry to do much of anything. I agree. Nothing has happened yet and odds are nothing will happen. The contract with Sanofi made it clear that Mannkind would not see any payment unless Sanofi didn't abide by the contract. Sanofi did. Sanofi has been probably telling Matt to go pound sand. But who knows. Maybe Mannkind has better lawyers than they do C level executives.they are all the same as they would have advised the c level executives at the time of deal too?
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Post by peppy on Jul 25, 2016 15:27:13 GMT -5
Sanofi has a $60 million lien against the facility in Valencia. Correction : Sanofi has a 60 Million dollar loan to Mannkind at a Rate of 8.5%, the collateral against this loan is everything owned by Mannkind including patents, property, inventory... Mannkind defaults on this loan Sanofi is the new owner of everything Mannkind. Shareholders get absolutely nothing! Sanofi is not going to forgive anything, they're hoping for a default. Almost seems like they planned it this way huh! Is this true?
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Post by therealisaching on Jul 25, 2016 15:30:22 GMT -5
from the 1q 10q
The obligations of the Company under the Sanofi Loan Facility are guaranteed by the Company’s wholly-owned subsidiary, MannKind LLC, and are secured by a first priority security interest in certain insulin inventory located in the United States and any contractual rights and obligations pursuant to which the Company purchases or has purchased such insulin, and a second priority security interest in the Company’s assets that secure the Company’s obligations under the Facility Agreement, as amended. In addition, the Company granted to Sanofi, as additional security for the obligations under the Sanofi Loan Facility, a first priority mortgage on the Company’s facility in Valencia, California, which has a carrying value of $17.7 million as of March 31, 2016.
Advances under the Sanofi Loan Facility bear interest at a rate of 8.5% per annum and are payable in-kind and compounded quarterly and added to the outstanding principal balance under the Sanofi Loan Facility. The Company is required to make mandatory prepayments on the outstanding loans under the Sanofi Loan Facility from its share of any profits (as defined in the Sanofi License Agreement) under the Sanofi License Agreement within 30 days of receipt of its share of any such profits. No advances may be made under the Sanofi Loan Agreement if Deerfield has commenced enforcement proceedings in connection with an event of default under the Facility Agreement.
The outstanding principal of all loans under the Sanofi Loan Facility, if not prepaid, will become due and payable on September 23, 2024 unless accelerated pursuant to the terms of the Sanofi Loan Facility. Additionally, if the Company sells its Valencia facility, the Company is required to prepay the loans under the Sanofi Loan Facility from the net cash proceeds of the sale within five business days of receipt. The maturity date of September 23, 2024 for repayment of the outstanding principal amount of the loans under the Sanofi Loan Facility is not affected by the termination of the Sanofi License Agreement.
The Company’s total cumulative portion of the loss sharing, including interest, was $68.8 million, of which $63.5 million was borrowed under the Sanofi Loan Facility as of March 31, 2016. Subsequent to March 31, 2016, the Company borrowed $5.3 million under the Sanofi Loan Facility to finance the portion of the Company’s loss for the quarter ended March 31, 2016. The total amount owed to Sanofi is $68.8 million, which includes $2.8 million in paid-in-kind interest capitalized as principal.
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Post by therealisaching on Jul 25, 2016 15:32:20 GMT -5
pep, I skimmed the response you were replying to quickly.
I disagree sny would step into mnkd's shoes.
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Post by jurystillout on Jul 25, 2016 16:43:12 GMT -5
Our obligations under the Facility Agreement, including any indebtedness under the 2019 notes and the Tranche B notes, and the Milestone Agreement are secured by substantially all of our assets, including our intellectual property, accounts receivables, equipment, general intangibles, inventory (excluding the insulin inventory) and investment property, and all of the proceeds and products of the foregoing. Our obligations under the Facility Agreement and the Milestone Agreement are also secured by a certain mortgage on our facility in Danbury, Connecticut. Our obligations under the Sanofi Loan Facility are secured by a first priority mortgage on our facility in Valencia, California, a first priority security interest in certain insulin inventory located in the United States and any contractual rights and obligations pursuant to which we purchase or have purchased such insulin, and a second priority security interest in our assets that secure our obligations under the Facility Agreement.
From Form 10-Q quarterly, I was wrong, the Sanofi Loan Facility utilizes the Valencia property and insulin inventory as collateral. Sorry for the misleading information.
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Post by anderson on Jul 25, 2016 18:25:37 GMT -5
The best thing MNKD can do to get Sanofi back is get sales up and then when we have the capital create products that goes after Sanofi's major markets and take them. Much more productive in the long run than the litigation would be today.
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Post by agedhippie on Jul 25, 2016 19:09:30 GMT -5
Just to point out that if this has indeed gone to arbitration neither side is allowed to disclose that fact so you are unlikely to know it has happened.
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Post by mydogskip on Jul 26, 2016 7:32:16 GMT -5
I agree. Nothing has happened yet and odds are nothing will happen. The contract with Sanofi made it clear that Mannkind would not see any payment unless Sanofi didn't abide by the contract. Sanofi did. Sanofi has been probably telling Matt to go pound sand. But who knows. Maybe Mannkind has better lawyers than they do C level executives.they are all the same as they would have advised the c level executives at the time of deal too? Good point unless Matt wised up and hired new lawyers. Al negotiated a stinker of a deal but then again, I don' think Mannkind had many options back then for partnership.
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Post by audiomr on Jul 26, 2016 11:33:05 GMT -5
Sanofi has a $60 million lien against the facility in Valencia. Correction : Sanofi has a 60 Million dollar loan to Mannkind at a Rate of 8.5%, the collateral against this loan is everything owned by Mannkind including patents, property, inventory... Mannkind defaults on this loan Sanofi is the new owner of everything Mannkind. Shareholders get absolutely nothing! Sanofi is not going to forgive anything, they're hoping for a default. Almost seems like they planned it this way huh! Is this true? Even if it were, it hardly matters. If Mannkind doesn't have the money to repay the loan by 2024 the situation is hopeless anyway.
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Post by audiomr on Jul 26, 2016 11:34:36 GMT -5
The best thing MNKD can do to get Sanofi back is get sales up and then when we have the capital create products that goes after Sanofi's major markets and take them. Much more productive in the long run than the litigation would be today. Mannkind's priority should be making money, not getting back at anyone.
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Post by Deleted on Jul 26, 2016 13:29:09 GMT -5
SUCCESS IS THE BEST REVENGE
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Post by dreamboatcruise on Jul 26, 2016 19:54:40 GMT -5
SUCCESS IS THE BEST REVENGE Or Mannkind could sleep with SNY's best friend.
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Post by sportsrancho on Jul 26, 2016 20:09:39 GMT -5
SUCCESS IS THE BEST REVENGE Or Mannkind could sleep with SNY's best friend. Classic! Love it:-)
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