Wednesday, August 23, 2006, 8/23/2006 02:21:00 PM

Take-Over Battle at Delcath Systems Continues to Include Trade Secret Misappropriation Issues

By Todd
Take-over battles are particularly messy affairs. Allegations of trade secret misappropriation are rarely focal points in these battles. That said, Delcath System's management team and Board are gearing up for a big take-over battle with Laddcap Value Partners. Check out this portion of Delcath's shareholder mailing that went out yesterday:

Mr. Ladd's proposed slate of nominees is a cause for great concern. If trust is an important factor in corporate governance, how are shareholders supposed to trust a board with members such as Jonathan Foltz, a man who has been sued by Delcath for misappropriation and theft of Delcath's highly confidential trade secrets, unfair trade practices, breach of loyalty and other serious claims, and who himself, as recently as April of 2006, described Mr. Ladd's accusations against the Company as "absurd" and complained of Mr. Ladd's "bullying tactics"? We cannot help but wonder if a consulting fee from Laddcap, the allure of a position as Delcath's Chief Executive Officer if Mr. Koly leaves, and reimbursement for legal and office expenses by Laddcap contributed to Mr. Foltz's apparent change of mind.

This is a messy one, friends. If Laddcap fires back, we'll post their response.

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