We've written several times about the recent legal disputes between Steven K. Fleischmann and his former partners at Washington, DC-based risk consultancy, TD International. The firm filed suit against Fleischmann claiming beach of contract and seeking to recover money they say Fleischmann pocketed by skimming business surreptitiously to a side-business, Tertuim Datur International.

The initial filings in the case have provided an interesting window into TD International's activities (Fleischmann contended that these sorts of side-ventures were common amongst the partners) and raised questions as to whether Fleischmann had ever officially signed off on his partner agreement in the first place. In late October, Fleischmann filed a counter suit against TD International principals, William Green and Ronald Slimp.

The countersuit lobs the breach of contract claims back at Green and Slimp, citing their failure to pay Fleischmann for his interest in the company when he agreed to exit the partnership in May of 2008. The suit also claims that Slimp and Green, in pursing their own third-party business ventures, failed to provide "best efforts and substantially all of their working time" to TD International, violating the terms of the partner agreement drafted back in 2004.

Fleischmann's complaint questions his level of compensation over the course of the partnership, citing numbers that would indicate his distributions from TD International were not commensurate with his position as a 1/3 partner in the business. Revenue and distribution numbers are provided in the complaint to illustrate that Fleischmann's distributions were insufficient, relative to the terms set forth in the TD International partnership agreement.

Also, intriguingly, as early as September 2004, Fleischmann contends that William Green and Ronald Slimp were operating an entity called TD Federal Services. In 2006, according to the complaint Ronald Slimp also conducted "substantial business" via TD Equity Partners. While Fleischmann states that he received some compensation from these entities, his complaint contends that these distributions were likewise insufficient.

Fleischmann is seeking damages to the tune of $4,000,000 in lost compensation and property.

No doubt, answers to these claims from TD International are forthcoming.

- MDT

Labels: Ronald Slimp, TD International Steven Fleischmann, William Green

The bad blood between rival drug developers Amphastar and Momenta has bubbled over into public view. Questions over the firms' competing franchise for a generic version of the blockbuster blood thinner Lovenox has led to allegations of misconduct at the FDA, the hiring of a prominent security firm to investigate those accusations and the announcement of a Congressional investigation into the hiring of said security company.

Amphastar and Momenta are both seeking approval to sell a their own version of the blood thinner heparin. While the companies are neck-in-neck for approval, Amphastar actually applied two years ahead of Momenta. The years of regulatory delays, while billions of dollars hang in the balance, have seen the competition between the two pharmaceutical companies turn decidedly ugly. Squabbling over the fairness of the FDA's drug approval processes has led to charges of favoritism.

Amphastar has gone so far as to file a complaint alleging that Momenta had received preferential treatment from Janet Woodcock, director of the FDA/s Center for Drug Evaluation and Research. The Amphastar complaint sought Woodcock's recusal from the proceedings, and cited supposed special access to Woodcock enjoyed by Momenta and the fact that Woodcock had co-autored a scientific paper with Momenta researchers during the period both companies were pursuing FDA approval for their generic version of the blockbuster blood thinner.

For its part, Momenta contends that the contact with the FDA has been appropriate and that Momenta has certainly lobbied the government to utilize a higher standard for approving a heparin generic - one that presumably Momenta would be able to meet, but Amphastar might not. The FDA has seemed responsive to Momenta's line of argument citing evolving science and the complexity of the drugs in question.

The FDA has defended its neutrality, noting that their calls for more details on immune reactions affected both drug makers.

Not content with the FDA's administrative investigation into Woodcock (the FDA will not even confirm such an investigation) Amphastar sought outside help from noted investigative firm, Kroll. That move has caught the attention of senators Max Baucus and Chuck Grassley. The two informed Amphastar of their probe in late September via a joint letter, citing concerns over a drug company hiring an outside firm to investigate a Federal regulatory agency.

We'll see what comes of it...

Labels: Amphastar, Kroll, Momenta

Arrested late last week, Zvi Goffer's name has emerged as a lynchpin for insider information in the Galleon Group insider trading case.

The track suit-wearing Goffer's activities represent another crooked crew operating alongside and in concert with the Raj Rajaratnam-led hedge fund scheme.

One of Goffer's alleged key sources, Ropes and Gray attorney Arthur Cutillo, was also arrested.

Given how quickly the SEC's case has expanded, Bloomberg has provided a helpful rundown of all the folks swept up in the Galleon net.

You can also review the SEC's complaint here.

-- MDT

Returning from a bit of vacation and slowly getting back in the swing. Been dealing with a rather large to-do backlog so my apologies to the kind tipsters that have sent me things. I'll be back in full swing by Monday. In the meantime, here's a bit of what we got up to.