Annual report pursuant to Section 13 and 15(d)

Note 16 - Commitments and Contingencies

Note 16 - Commitments and Contingencies
12 Months Ended
Dec. 31, 2017
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]
Commitments and Contingencies
We are subject to legal proceedings and claims that arise in the ordinary course of business.
Sinotau Litigation
August 31, 2015,
Sinotau filed a suit for damages, specific performance, and injunctive relief against the Company in the U.S. District Court for the District of Massachusetts alleging breach of a letter of intent for licensing to Sinotau of the Company
product candidate and technology.  In
September 2016,
the Court denied the Company’s motion to dismiss.  The Company filed its answer to the complaint and the parties have filed multiple joint motions to stay the case pending settlement discussion, which to date have been granted.  On
October 26, 2017,
the Company executed a letter of intent with Sinotau and Cerveau, outlining a plan to sublicense to Cerveau the worldwide rights to conduct research using
as well as grant to Cerveau an exclusive license for the development, marketing and commercialization of
in Australia, Canada, China and Singapore.  The letter of intent includes a provision stating that Sinotau will release all claims in the Sinotau Litigation upon the parties’ execution of a definitive agreement; the commercial rights agreement contemplated by the letter of intent would also include a release of such claims and a covenant
to sue on such claims.
CRG Litigation
During the course of
CRG alleged multiple claims of default on the CRG Loan Agreement, and filed suit in the District Court of Harris County, Texas
April 7, 2016.
June 22, 2016,
CRG exercised control over
of the Company’s primary bank accounts and took possession of
million that was on deposit, applying
million of the cash to various fees, including collection fees, a prepayment premium and an end-of-term fee. The remaining
was applied to the principal balance of the debt. Multiple motions, actions and hearings followed over the remainder of
and into
March 3, 2017,
the Company entered into a Global Settlement Agreement with MT, CRG, and Cardinal Health
to effectuate the terms of a settlement previously entered into by the parties on
February 22, 2017.
In accordance with the Global Settlement Agreement, on
March 3, 2017,
the Company repaid the
million Deposit Amount of its alleged indebtedness and other obligations outstanding under the CRG Term Loan. Concurrently with payment of the Deposit Amount, CRG released all liens and security interests granted under the CRG Loan Documents and the CRG Loan Documents were terminated and are of
further force or effect; provided, however, that, notwithstanding the foregoing, the Company and CRG agreed to continue with their proceeding pending in the Texas Court to fully and finally determine the Final Payoff Amount. The Company and CRG further agreed that the Final Payoff Amount would be
less than
million and
more than
million. In addition, CRG agreed that Navidea had the right to assert all affirmative defenses to its claim of default.  In the underlying case the district court had entered summary judgment in favor of CRG finding unspecified events of default but refusing to consider affirmative defenses raised by Navidea as
before the Court.  Subsequent to the settlement CRG moved again for entry of judgment in its favor; Navidea objected that the Settlement Agreement specifically allowed it to raise affirmative defenses and the district court agreed with Navidea setting the case for trial in
December 2017. 
CRG once again moved for summary judgment and the motion was heard by the Court on
October 30, 2017.
oncurrently with the payment of the Deposit Amount and closing of the Asset Sale, (i) Cardinal Health
posted a
million letter of credit in favor of CRG (at the Company’s cost and expense to be deducted from the closing proceeds due to the Company, and subject to Cardinal Health
indemnification rights under the Purchase Agreement) as security for the amount by which the High Payoff Amount exceeds the Deposit Amount in the event the Company is unable to pay all or a portion of such amount, and (ii) CRG posted a
million letter of credit in favor of the Company as security for the amount by which the Deposit Amount exceeds the Low Payoff Amount. If, on the
hand, it is finally determined by the Texas Court that the amount the Company owes to CRG under the Loan Documents exceeds the Deposit Amount, the Company will pay such excess amount, plus the costs incurred by CRG in obtaining CRG’s letter of credit, to CRG and if, on the other hand, it is finally determined by the Texas Court that the amount the Company owes to CRG under the Loan Documents is less than the Deposit Amount, CRG will pay such difference to the Company and reimburse Cardinal Health
for the costs incurred by Cardinal Health
in obtaining its letter of credit. Any payments owing to CRG arising from a final determination that the Final Payoff Amount is in excess of
million shall
be paid by the Company without resort to the letter of credit posted by Cardinal Health
and such letter of credit shall only be a secondary resource in the event of failure of the Company to make payment to CRG. The Company will indemnify Cardinal Health
for any costs it incurs in payment to CRG under the settlement, and the Company and Cardinal Health
further agree that Cardinal Health
can pursue all possible remedies, including offset against earnout payments (guaranteed or otherwise) under the Purchase Agreement, warrant exercise, or any other payments owed by Cardinal Health
or any of its affiliates, to the Company, or any of its affiliates, if Cardinal Health
incurs any cost associated with payment to CRG under the settlement. The
million being held in escrow pursuant to court order in the Ohio case and the
million being held in escrow pursuant to court order in the Texas case were released to the Company at closing of the Asset Sale.
The trial was held in Texas in
December 2017.
  The Texas Court ruled that the Company’s total obligation to CRG is in excess of
million, limited to
million under the Global Settlement Agreement.  The Texas Court acknowledged only the
million payment made in
March 2017,
concluding that the Company owes CRG another
million, however the Texas Court did
expressly take the Company’s
June 2016
payment of
million into account.  The Company believes that this
million should be credited against the
million; CRG disagrees.  On
January 16, 2018,
the Company filed an emergency motion to set supersedeas bond and to modify judgment, describing the Texas Court’s oversight of
explaining how to apply the
million payment, requesting that the judgment be modified to set the supersedeas amount at
million so that the Company can stay enforcement of the judgment pending appeal.  The Texas Court refused to rule on this motion, and the court of appeals entered an order compelling the Texas Court to set a supersedeas amount.  The Texas Court has scheduled a hearing on the issue for
March 26, 2018,
however it has
yet set the amount, and enforcement of the judgment is stayed until
days after the Texas Court does so.  We currently await further action by the Texas Court. 
’s management believes it is probable that the Company will be required to pay the
million modified judgment requested in
January 2018,
and as such we accrued a loss contingency for that amount as a current liability on the
December 31, 2017
consolidated balance sheet. The loss contingency of
million was recorded as an additional loss on extinguishment of the CRG Term Loan on the consolidated statement of operations for the year ended
December 31, 2017.
Former CEO Arbitration
May 12, 2016
the Company received a demand for arbitration through the American Arbitration Association, Columbus, Ohio, from Ricardo J. Gonzalez, the Company
’s then Chief Executive Officer, claiming that he was terminated without cause and, alternatively, that he resigned in accordance with Section
of his Employment Agreement pursuant to a notice received by the Company on
May 9, 2016.
May 13, 2016,
the Company notified Mr. Gonzalez that his failure to undertake responsibilities assigned to him by the Board of Directors and otherwise work after being ordered to do so on multiple occasions constituted an effective resignation, and the Company accepted that resignation. The Company rejected the resignation of Mr. Gonzalez pursuant to certain provisions in Section
of his Employment Agreement. Also, the Company notified Mr. Gonzalez that, alternatively, his failure to return to work after the expiration of the cure period provided in his Employment Agreement constituted cause for his termination under his Employment Agreement. Mr. Gonzalez was seeking severance and other amounts claimed to be owed to him under his Employment Agreement. In response, the Company filed counterclaims against Mr. Gonzalez alleging malfeasance by Mr. Gonzalez in his role as Chief Executive Officer. Mr. Gonzalez withdrew his claim for additional severance pursuant to his Employment Agreement, and the Company withdrew its counterclaims. On
May 12, 2017,
the Company received a ruling in favor of Mr. Gonzalez finding that he was terminated by the Company without cause on
April 7, 2016.
Mr. Gonzalez was awarded salary, bonus, and benefits in the aggregate amount of
plus interest, attorneys’ fees, and other costs. The arbitration award is final and binding on the parties. The Company paid an aggregate of
to Mr. Gonzalez on
May 16, 2017.
FTI Consulting, Inc. Litigation
October 11, 2016,
FTI Consulting, Inc. (“FTI”) commenced an action against the Company in the Supreme Court of the State of New York, County of New York, seeking damages in excess of
comprised of: (i)
for investigative and consulting services FTI alleges to have provided to the Company pursuant to an Engagement Agreement
between FTI and the Company, and (ii) in excess of
for purported interest due on unpaid invoices, plus attorneys’ fees, costs and expenses.  On
November 14, 2016,
the Company filed an Answer and Counterclaim denying the allegations of the Complaint and seeking damages on its Counterclaim, in an amount to be determined at trial, for intentional overbilling by FTI. On
February 7, 2017,
a preliminary conference was held by the Court at which time a scheduling order governing discovery was issued. On
June 26, 2017,
the Company and FTI entered into a settlement agreement. According to FTI, as of
June 2017,
FTI was owed
including interest charges and legal fees. Under the terms of the settlement agreement, the Company paid an aggregate of
to FTI on
June 30, 2017.
Sinotau Litigation
February 1, 2017,
Navidea filed suit against Sinotau in the U.S. District Court for the Southern District of Ohio.
  The Company's complaint included claims seeking a declaration of the rights and obligations of the parties to an agreement regarding rights for the
tilmanocept product in China and other claims.  The complaint sought a temporary restraining order (“TRO”) and preliminary injunction to prevent Sinotau from interfering with the Company’s Asset Sale to Cardinal Health
February 3, 2017,
the Court granted the TRO and extended it until
March 6, 2017. 
The Asset Sale closed on
March 3, 2017. 
March 6,
the Court dissolved the TRO as moot.  Sinotau also filed a suit against the Company and Cardinal Health
in the U.S. District Court for the District of Delaware on
February 2, 2017. 
July 12, 2017,
the District of Delaware case was transferred to the Southern District of Ohio.  On
July 27, 2017
the Ohio Court determined that both cases in the Southern District of Ohio are related and the case was stayed for
days pending settlement discussions.  On
February 8, 2018,
Navidea and Sinotau executed an amendment to the agreement, modifying certain terms of the agreement and effectively resolving the legal dispute.  On
February 17, 2018,
Navidea and Sinotau executed a Settlement Agreement and Mutual Release, and on
February 20, 2018,
Navidea and Sinotau voluntarily dismissed their legal cases.
Platinum-Montaur Life Sciences LLC
November 2, 2017,
Platinum-Montaur commenced an action against the Company in the Supreme Court of the State of New York, County of New York, seeking damages in the amount of
purportedly due as of
March 3, 2017,
plus interest accruing thereafter.
  The claims asserted are for breach of contract and unjust enrichment in connection with funds received by the Company under the Platinum Loan Agreement (discussed above).  Said action was removed to the United States District of New York on
December 6, 2017. 
An initial pretrial conference was held on
January 26, 2018. 
At the conference the Court stayed the deadline for the Company to answer or otherwise respond to the complaint.  The Court also directed the parties to engage in informal jurisdictional discovery and a follow up status conference was held on
March 9, 2018,
during which the Court set a briefing schedule and determined that Navidea’s motion to dismiss is due on
April 6, 2018. 
The Court also referred the case to a settlement conference, which has been scheduled for
April 30, 2018.   
Because the funds sought by Platinum-Montaur are subject to claims of competing ownership, the Company intends to defend itself in the action and seek a determination as to whether any funds are due and owing to the plaintiff.
In accordance with ASC Topic
, we make a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Although the outcome of any litigation is uncertain, in our opinion, the amount of ultimate liability, if any, with respect to these actions, other than the CRG litigation for which we have accrued a contingent liability, will
materially affect our financial position.