Molson, I think you might be selling AMK a little short in regards to the amount of damages if TUO is found to be in breach.
Compensatory damages - a court may award money damages designed to restore the injured party to the economic position that he or she had occupied at the time the contract was entered
Most would agree that share price is a good indicator of the economic position of a company so all we have to determine is whether the judge will decide using the share price of before the contract was entered or when the breach occurred.
Share price April 2007 (before agreement was finalized) - $2.30/share
Share price September 2009 (when AMK informed TUO that terms of earn in were satisfied) -
.28/share
So using the 2007 amount we have a price discrepancy of approx $2.24 a share, using the 2009 amount we have a price discrepancy of approx
.22/share. Now for the fun part...
$2.24/share x 139,051,861 (shares out) = $311,476,168.64 (aka TUO bankrupt)
.22 x 139,051,861 (shares out) = $30,591,409.42 (this in my opinion is the more likely as AMK is asking for the agreement to be upheld, but the results are the same, TUO bankrupt).
One may argue that the number of shares used in the calculation should equal the shares out at the time of the breach, and that may end up being the case, however I think TUO may have thrown that possibility out the window by forcing AMK into releasing more shares to stay financially afloat as this case has been dragged out. If however we entertain that the shares should reflect the total at the time of breech the calculation becomes much more favorable for TUO
.22 x 80,390,212 (shares out as of end of 2009) = $17,685,846.64 (oops I think this still means TUO is bankrupt!)
This does not take into account punitive damages that may be awarded by the court to serve as a deterrance to other companies operating in BC from engaging in these types of frivolous lawsuits.
Cheers