SIGA Technologies Files For Chapter 11 Reorganization - Quick Facts

(RTTNews) - SIGA Technologies, Inc. (SIGA) announced that it has filed a voluntary petition for relief under chapter 11 of the United States Bankruptcy Code in  Bankruptcy Court for the Southern District of New York.

SIGA said it commenced the chapter 11 case to preserve and to assure its ability to satisfy its commitment to supply Tecovirimat, an antiviral smallpox drug being delivered to the U.S. Strategic National Stockpile under the Project BioShield Act of 2004. SIGA intends to operate during the chapter 11 period as a going concern for the benefit of the U.S. government and all economic stakeholders.

The chapter 11 filing will ensure that SIGA continues to supply Tecovirimat pursuant to its contract with the Biomedical Advanced Research and Development Authority OR BARDA, and is able to pursue what it believes is a meritorious appeal of a pending  Chancery Court proceeding, according to the company.

As disclosed previously, on August 8, 2014, the  Court of Chancery issued an opinion in the litigation initiated against SIGA in 2006 by PharmAthene, Inc. In that opinion, which SIGA believes was wrongly decided, the Court of Chancery determined, among other things, that PharmAthene is entitled to a lump sum damages award in an as yet unspecified amount, with interest and fees, based on  government purchases of SIGA's smallpox drug allegedly anticipated as of December 2006.

It is noted that the amount of the total judgment to be decreed by the Court of Chancery is likely to be substantial, and enforcement of that judgment by PharmAthene would jeopardize SIGA's viability and ability to produce and deliver Tecovirimat.

The commencement of the chapter 11 case will prevent PharmAthene from taking any enforcement action at this time and also will permit SIGA's intended appeal to go forward, according to the company.