FSD Pharma, Inc. Wins Petition to Confirm Arbitration Awards Entered Against Dr. Raza Bokhari Totaling Over $3 Million CAD, Plus Interest
On May 29, 2024, FSD Pharma (NASDAQ:HUGE) announced that the United States District Court for the Eastern District of Pennsylvania confirmed the company's Petition to Confirm Arbitration Awards against Dr. Raza Bokhari, its former CEO. The awards, issued by a Canadian arbitrator in 2022, total over CAD $3 million plus interest. The court found no valid basis to deny enforcement under the New York Convention. This legal victory follows Bokhari's termination in July 2021 and his unsuccessful arbitration challenge.
- Legal victory: FSD Pharma secured over CAD $3 million plus interest from Dr. Raza Bokhari.
- Court confirmation: The U.S. District Court validated FSD Pharma's Petition under the New York Convention.
- Interest benefits: Awards accumulate interest rates of 4% and 6% per annum until payment is fulfilled.
- Extended litigation: The legal process spanned multiple years, involving significant legal fees and resources.
- Former CEO dispute: The case highlights internal conflicts and leadership issues within the company.
Insights
The confirmation of FSD Pharma's arbitration awards by the United States District Court for the Eastern District of Pennsylvania is a significant legal victory for the company. This decision ensures that FSD Pharma can now enforce the awards and recover the owed amounts from Dr. Raza Bokhari.
The arbitration awards, confirmed under the New York Convention, signify a strong legal backing since this international treaty ensures that foreign arbitral awards are recognized and enforceable in the signatory countries. This international agreement is important for companies engaging in cross-border transactions and litigations, as it provides a solid legal framework and certainty.
From a legal perspective, the confirmation of these awards not only reinforces the validity of the arbitration process but also deters potential future disputes by showcasing the enforceability of arbitral decisions. This outcome can be viewed positively by shareholders, as it underscores the company's commitment to legal diligence and accountability.
However, while this victory might boost investor confidence in the short term, it's essential to consider the ongoing legal costs and potential time frames associated with actual recovery of the awarded amounts. Legal proceedings can be lengthy and further appeals or obstacles from the other party can delay the final resolution.
FSD Pharma's successful petition to confirm arbitration awards against Dr. Raza Bokhari translates to a financial gain of over
Recovering these funds could help offset previous legal expenses and demonstrate financial prudence, potentially making the stock more attractive to investors. Additionally, the reaffirmation of the arbitration awards might enhance investor trust in the company’s governance and management practices, especially following the termination of a high-level executive like a former CEO.
In the short term, this news could lead to a positive movement in the stock price as investors react to the potential financial inflow and the resolution of a longstanding legal issue. In the longer term, consistent and prudent use of recovered funds will be important to maximize shareholder value.
Investors should remain attentive to any subsequent announcements regarding the actual collection of these arbitration awards and the application of the funds, as these factors will ultimately determine the real impact on the company's financial health.
TORONTO, ON / ACCESSWIRE / May 31, 2024 / FSD Pharma Inc. (NASDAQ:HUGE)(CSE:HUGE)(FRA:0K9A) ("FSD Pharma"), a biopharmaceutical company dedicated to building a portfolio of innovative assets and biotech solutions to address ailments affecting millions worldwide, today announces that on May 29, 2024, the United States District Court for the Eastern District of Pennsylvania confirmed FSD Pharma, Inc.'s Petition to Confirm Arbitration Awards entered against Dr. Raza Bokhari by a Canadian arbitrator in 2022. Pursuant to the Federal Rules of Civil Procedure, FSD will now move for entry of final judgment against Bokhari, as follows:
- USD
$147,301.04 , plus interest at a rate of4% per annum from November 9, 2022 until the date the Judgment is satisfied. - CAD
$31,912.55 , plus interest at a rate of4% per annum from November 9, 2022 until the date the Judgment is satisfied. - CAD
$15,000.00 , plus interest at a rate of4% per annum from November 9, 2022 until the date the Judgment is satisfied. - CAD
$2,814,229.15 , plus interest at a rate of6% per annum from May 7, 2023 until the date the Judgment is satisfied.
In July 2021, FSD's board of directors terminated Bokhari, its former CEO. Bokhari filed an arbitration challenging this termination in Ontario, Canada. After years of litigation and an eight-day evidentiary hearing, the Arbitrator ruled against Bokhari and issued three awards against Bokhari in favor of FSD, including an award for damages and awards for FSD's fees and costs incurred in the arbitration.
FSD's Petition to Confirm the Arbitration Awards was filed in the United States District Court for the Eastern District of Pennsylvania under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 3 (the "New York Convention"). In its opinion granting FSD's Petition, the District Court found that Bokhari did not offer any valid basis under the New York Convention for the Court to deny enforcement of the arbitration awards against him.
Click the following links to view the final order and opinion, or the original award.
About FSD Pharma
FSD Pharma is a biopharmaceutical company dedicated to building a portfolio of innovative assets and biotech solutions for the treatment of challenging neurodegenerative and metabolic disorders and alcohol misuse disorders with drug candidates in different stages of development. Through its wholly owned subsidiary, Lucid Psycheceuticals Inc. ("Lucid"), FSD is focused on the research and development of its lead compound, Lucid-MS (formerly Lucid-21-302) ("Lucid-MS"). Lucid-MS is a patented new chemical entity shown to prevent and reverse myelin degradation, the underlying mechanism of multiple sclerosis, in preclinical models. FSD Pharma invented unbuzzd™ and spun it out its OTC version to a company, Celly Nutrition, led by industry veterans. FSD retains ownership of
Cautionary Note Regarding Forward-Looking Information
This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "plans", "expects", "expected", "scheduled", "estimates", "intends", "anticipates", "hopes", "planned" or "believes", or variations of such words and phrases, or states that certain actions, events or results "may", "could", "would", "might", "potentially" or "will" be taken, occur or be achieved. More particularly, and without limitation, this press release contains forward-looking statements contained in this press release include statements concerning the future of FSD Pharma and are based on certain assumptions that FSD Pharma has made in respect thereof as of the date of this press release, including those relating to Celly Nu and its launch of unbuzzd™; benefits, claims, and timelines with respect to unbuzzd™; details of the partnerships of Celly Nu, including the stated benefits of the BevSource partnership; the Company's business and goals, including the continued research and development of Lucid-MS, unbuzzd™, novel formulations for alcohol misuse disorders, and treatments for use in the healthcare sector; and the continued maintenance of its strategic investment portfolio. FSD Pharma cannot give any assurance that such forward-looking statements will prove to have been correct.
Since forward-looking statements relate to future events and conditions, by their very nature they require making assumptions and involve inherent risks and uncertainties. The Company cautions that although it believes the expectations and material factors and assumptions reflected in these forward-looking statements are reasonable as of the date hereof, there can be no assurance that these expectations, factors and assumptions will prove to be correct and these risks and uncertainties give rise to the possibility that actual results may differ materially from the expectations set out in the forward-looking statements, of which assumptions include: the Company will satisfy all applicable listing and regulatory requirements of the CSE and Nasdaq; the fact that the drug development efforts of the Company and Lucid are at a very early stage; the fact that preclinical drug development is uncertain, and the drug product candidates of the Company and Lucid may never advance to clinical trials; the fact that results of preclinical studies and early-stage clinical trials may not be predictive of the results of later stage clinical trials; the uncertain outcome, cost, and timing of product development activities, preclinical studies and clinical trials of the Company and Lucid; the uncertain clinical development process, including the risk that clinical trials may not have an effective design or generate positive results; the potential inability to obtain or maintain regulatory approval of the drug product candidates of the Company and Lucid; the introduction of competing drugs that are safer, more effective or less expensive than, or otherwise superior to, the drug product candidates of the Company and Lucid; the initiation, conduct, and completion of preclinical studies and clinical trials may be delayed, adversely affected or impacted by unforeseen issues; the potential inability to obtain adequate financing; the potential inability to obtain or maintain intellectual property protection for the drug product candidates of the Company and Lucid; the Company's inability to benefit from Celly Nu and its launch of unbuzzd™; the Company's inability to realize upon the benefits, claims, and timelines with respect to unbuzzd™; the Company's inability to realize upon the stated benefit from the partnerships of Celly Nu; the Company's inability to carryout its business and goals, including the continued research and development of Lucid-MS, unbuzzd™, novel formulations for alcohol misuse disorders, and treatments for use in the healthcare sector; and the Company's inability to maintain its strategic investment portfolio. Accordingly, readers should not place undue reliance on the forward-looking statements contained in this press release, which speak only as of the date of this press release.
These forward-looking statements are not guarantees of future performance and are subject to a number of known and unknown risks and uncertainties including, but not limited to: the timing and ability to satisfy all applicable listing and regulatory requirements of the CSE and Nasdaq; the fact that the drug development efforts of the Company and Lucid are at a very early stage; the fact that preclinical drug development is uncertain, and the drug product candidates of the Company and Lucid may never advance to clinical trials; the fact that results of preclinical studies and early-stage clinical trials may not be predictive of the results of later stage clinical trials; the uncertain outcome, cost, and timing of product development activities, preclinical studies and clinical trials of the Company and Lucid; the uncertain clinical development process, including the risk that clinical trials may not have an effective design or generate positive results; the potential inability to obtain or maintain regulatory approval of the drug product candidates of the Company and Lucid; the introduction of competing drugs that are safer, more effective or less expensive than, or otherwise superior to, the drug product candidates of the Company and Lucid; the initiation, conduct, and completion of preclinical studies and clinical trials may be delayed, adversely affected or impacted by unforeseen issues; the potential inability to obtain adequate financing; the potential inability to obtain or maintain intellectual property protection for the drug product candidates of the Company and Lucid; the Company's inability to benefit from Celly Nu and its launch of unbuzzd™; the Company's inability to realize upon the benefits, claims, and timelines with respect to unbuzzd™; the Company's inability to realize upon the stated benefit from the partnerships of Celly Nu; the Company's inability to carryout its business and goals, including the continued research and development of Lucid-MS, unbuzzd™, novel formulations for alcohol misuse disorders, and treatments for use in the healthcare sector; and the Company's inability to maintain its strategic investment portfolio. Accordingly, readers should not place undue reliance on the forward-looking statements contained in this press release, which speak only as of the date of this press release.
Further information regarding factors that may cause actual results to differ materially are included in the Company's annual and other reports filed from time to time with the Canadian Securities Administrators on SEDAR+ (www.sedarplus.ca) and with the SEC on EDGAR (www.sec.gov), including the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2023, the Prospectus and Registration Statement, each under the heading "Risk Factors". This list of risk factors should not be construed as exhaustive. Readers are cautioned that events or circumstances could cause results to differ materially from those predicted, forecasted or projected. The forward-looking statements contained in this document speak only as of the date of this document. FSD Pharma does not undertake any obligation to publicly update or revise any forward-looking statements or information contained herein, except as required by applicable laws. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.
The Company makes no medical, treatment or health benefit claims about unbuzzd™. The U.S. Food and Drug Administration, Health Canada or other similar regulatory authorities have not evaluated any claims regarding unbuzzd™. The efficacy of such products have not been confirmed by approved research. Rigorous scientific research and clinical trials are needed. No clinical trials for the use of the Company's proposed products have been conducted. Any references to quality, consistency, efficacy and safety of potential products do not imply that the Company verified such in clinical trials or that the Company will complete such trials.
Neither the CSE nor its regulation services provider accept responsibility for the adequacy or accuracy of this release.
Contacts:
FSD Pharma Inc.
Zeeshan Saeed, Founder, CEO and Executive Co-Chairman of the Board, FSD Pharma Inc.
Email: Zsaeed@fsdpharma.com
Telephone: (416) 854-8884
Investor Relations
Email: ir@fsdpharma.com, info@fsdpharma.com
Website: www.fsdpharma.com
SOURCE: FSD Pharma Inc.
View the original press release on accesswire.com
FAQ
What was the outcome of FSD Pharma's arbitration case against Dr. Raza Bokhari?
When did the U.S. District Court confirm FSD Pharma's arbitration awards?
What interest rates apply to the arbitration awards against Dr. Raza Bokhari?
Why was Dr. Raza Bokhari terminated from FSD Pharma?
