In Dr. Michael Goldberg resigned from his positions as an executive officer and a director of Navidea.  In connection with Dr. Goldberg's resignation, Navidea and Dr. Goldberg entered into an Agreement (the “Goldberg Agreement”), with the intent of entering into or more additional definitive agreements, which set forth the terms of the separation from service. On Dr. Goldberg represented to the MT board of directors that he had, without MT board of directors or shareholder approval, created a subsidiary of MT, transferred all of the assets of MT into the subsidiary, and then issued himself stock in the subsidiary.  On Navidea notified MT that it was terminating the sublicense in accordance with its terms, effective due to MT's insolvency.  On the MT board of directors removed Dr. Goldberg as President and Chief Executive Officer of MT and from any other office of MT to which he have been appointed or in which he was serving.  Dr. Goldberg remains a member of the MT board of directors, together with Y. Michael Rice and Dr. Claudine Bruck.  Mr. Rice and Dr. Bruck also remain members of Navidea's Board of Directors.  The MT board of directors then appointed Jed A. Latkin to serve as President and Chief Executive Officer of MT.

 

 

On Navidea filed a complaint against Dr. Goldberg in the United States District Court, Southern District of New York (the “District Court”), alleging breach of the Goldberg Agreement, as well as a breach of the covenant of good faith and fair dealing and to obtain a declaratory judgment that Navidea's performance under the Goldberg Agreement is excused and that Navidea is entitled to terminate the Goldberg Agreement as a result of Dr. Goldberg's actions. On Navidea filed an amended complaint against Dr. Goldberg which added a claim for breach of fiduciary duty seeking damages related to certain actions Dr. Goldberg took while CEO of Navidea. On Dr. Goldberg answered the amended complaint and asserted counterclaims against Navidea and -party claims against MT for breach of the Goldberg Agreement, wrongful termination, injunctive relief, and quantum meruit.

 

On the District Court ruled on several motions related to Navidea and MT and Dr. Goldberg that substantially limited the claims that Dr. Goldberg can pursue against Navidea and MT. Specifically, the District Court found that certain portions of Dr. Goldberg's counterclaims against Navidea and -party claims against MT failed to state a claim upon which relief can be granted. Additionally, the Court ruled that actions taken by Navidea and MT, including reconstituting the MT board of directors, replacing Dr. Goldberg with Jed A. Latkin as Chief Executive Officer of MT, terminating the sublicense between Navidea and MT, terminating certain research projects, and allowing MT intellectual property to revert back to Navidea, were breaches of the Goldberg Agreement.

 

The District Court also rejected Dr. Goldberg's claim for wrongful termination as Chief Executive Officer of MT. In addition, the District Court found that Dr. Goldberg lacked standing to seek injunctive relief to force the removal of Dr. Claudine Bruck and Y. Michael Rice from MT's board of directors, to invalidate all actions taken by the MT board of directors on or after the date upon which Dr. Bruck and Mr. Rice were appointed by Navidea to the MT board of directors), or to reinstate the terminated sublicense between Navidea and MT.

 

In addition, the District Court found Navidea's breach of fiduciary duty claim against Dr. Goldberg for conduct occurring more than years prior to the filing of the complaint to be time-barred and that Dr. Goldberg is entitled to an advancement of attorneys' fees solely with respect to that claim. The parties are in the process of submitting the issue to the District Court for resolution on how much in fees Dr. Goldberg is owed under the District Court's order.

 

On Dr. Goldberg filed a motion seeking additional advancement from Navidea for fees in connection with the New York Action and the Delaware Action. Navidea has opposed the motion and the District Court referred the matters to a Magistrate Judge. On the Magistrate Judge issued her Report and Recommendation which recommended that: () the District Court decline to exercise jurisdiction over Dr. Goldberg's motion as it pertained to expenses and fees incurred in defense of the Delaware Action; () the District Court decline to award any fees to Dr. Goldberg for the breach of fiduciary duty without additional motion practice on the issue; () the District Court find that Dr. Goldberg is entitled to advancement of his expenses and fees reasonably incurred in the defense of the remainder of the New York action subject to Dr. Goldberg's posting of an undertaking; and () establish a protocol by which Dr. Goldberg could establish the amounts due for advancement.

 

On Dr. Goldberg filed a motion for leave to amend his complaint to add back in claims for breach of contract, breach of the implied covenant of good faith and fair dealing, quantum meruit and injunctive relief. On the District Court denied Dr. Goldberg's motion for leave to amend in its entirety.

 

On in connection with Dr. Goldberg's motion for advancement, the District Court adopted the Magistrate Judge's report and recommendation and found that while Dr. Goldberg was being granted advancement of fees and expenses incurred in connection with either the Delaware Action or the assertion of -party claims against MT, the Court ruled that Dr. Goldberg was entitled to advancement for the defense of the remaining claims asserted against him by Navidea in the New York action.  The Court adopted a protocol by which additional motion practice will occur to determine the appropriate amount of fees to be advanced. Such briefing is anticipated to be concluded by Once that decision is made by the Magistrate Judge, subject to review by the District Court, Navidea will need to advance those fees to Dr. Goldberg conditioned upon Dr. Goldberg agreeing to pay those fees back to Navidea if it is determined that he is entitled to indemnification.  Dr. Goldberg is also asking the Court to accelerate the timeline by which advancement will occur.

 

The fact discovery deadline in the New York Action was set to expire in but is anticipated to be extended in light of a few remaining discovery disputes between the parties. Thereafter, the parties will engage in expert discovery for a period of days.

 

 

On MT initiated a suit against Dr. Goldberg in the Court of Chancery of the State of Delaware (the “Delaware Court”), alleging, among other things, breach of fiduciary duty as a director and officer of MT and conversion, and to obtain a declaratory judgment that the transactions Dr. Goldberg caused MT to effect are void.  On the Delaware Court found that Dr. Goldberg's actions were authorized in compliance with the Delaware General Corporation Law.  Specifically, the Delaware Court found that Dr. Goldberg's creation of a new subsidiary of MT and the purported assignment by Dr. Goldberg of MT's intellectual property to that subsidiary were void.  The Delaware Court's ruling follows the order on in the case, in which it found Dr. Goldberg in contempt of its prior order holding Dr. Goldberg responsible for the payment of MT's fees and costs to cure the damages caused by Dr. Goldberg's contempt.   MT's claims for breach of fiduciary duty and conversion against Dr. Goldberg remain pending.  As a result of the Delaware Court's ruling and Navidea's prior termination of the sublicense between itself and MT, all of the intellectual property related to the Manocept platform is now directly controlled by Navidea. A trial on MT's claims against Goldberg for breach of fiduciary duty and conversion is presently scheduled for through

 

 

On Dr. Goldberg served shareholder demands on the boards of directors of Navidea and MT repeating many of the claims made in the lawsuits described above. On or about Dr. Goldberg commenced a derivative action purportedly on behalf of MT in the District Court against Dr. Claudine Bruck, Y. Michael Rice, and Jed Latkin alleging a claim for breach of fiduciary duty based on the actions alleged in the demands. On Dr. Goldberg dismissed the derivative action in New York without prejudice and retains the ability to re-file the action in Delaware. Dr. Goldberg has yet re-filed his derivative complaint. See Notes and