1. The Statement does not contain "adequate information" within the meaning
of section 1125 of the Bankruptcy Code and cannot be approved unless it is modified to
provide additional and clarifying information.
2. Section 1125(b) of the Bankruptcy Code conditions a debtor's solicitation of
votes on a proposed chapter 11 plan on the bankruptcy court’s determination that the
disclosure statement contains "adequate information." The Bankruptcy Code defines
adequate information as:
[I]nformation of a kind, and in sufficient detail, as far as is
reasonably practicable in light of the nature and history of the
debtor and the condition of the debtor’s books and records, that
would enable a hypothetical reasonable investor typical of
claims or interests in the relevant class to make an informed
judgment about the plan . . .
3. The Statement provides at p. 56:
"Patriot contends that any controversies arising out of the [July
2014] PDS-Alliacense Agreement must be resolved prior to
and as a condition of Plan confirmation, and that certain
controversies still exist arising out of obligations under the
PDS-Alliacense Agreement, including the following:
(1) obtaining TPL's approval of a second MMP licensing
company as appointed by PDS, and (2) appointment of a third
PDS Manager. Patriot also contends that upon
accomplishment of the former obligation, the PDS-Alliacense
Agreement provides that Alliacense is obligated to deliver the
lists of prospective licensees to be considered (and associated
work product) to PDS."
Case: 13-51589 Doc# 577 Filed: 10/10/14 Entered: 10/10/14 15:32:28 Page 2 of
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KNLH\1322933.1 -3- 13-51589-SLJ-11
AMENDED OBJECTION BY PATRIOT SCIENTIFIC
CORPORATION TO JOINT DISCLOSURE STATEMENT
Kirby
Noonan
Lance
&
Hoge
LLP
350
Tenth
Avenue,
Suite
1300
San
Diego,
California
92101-‐8700
4. The Statement is misleading and incomplete in that it does not reveal the
problems Patriot has encountered and continues to encounter since the referenced July
2014 Agreement was executed.
5. Listing the Patriot "contentions" does not clarify that the Plan should not go
forward until these matters are resolved. The Statement does not tell the whole story and
these issues are critical to the Plan's success.
6. Patriot identified a second MMP patent licensing company, but experienced
a procession of delays and excuses orchestrated by Dan Leckrone, articulated though
Mr. Venkidu, which delayed the retention of the second MMP patent licensing company
for approximately six weeks. It appears Patriot's October 1, 2014 objection was the
impetus for Mr. Venkidu's consent finally articulated late on October 9, 2014.
7. Second, the July 2014 Agreement contemplates Alliacense preparing two
lists of prospective MMP licensees in which Alliacense is indifferent between the two.
Notice has been given to Alliacense to present the two lists but they have not been
presented to Patriot as required under the July 2014 Agreement. Notice of breach has been
provided to Alliacense but it still has not responded.
8. The past difficulties with Alliacense raise a concern that there will be further
delay or some other disagreement that will prevent the second MMP licensing company
from going forward, a disagreement how the universe of MMP licensees is divided
between it and Alliacense, or other such uncertainty that will delay the MMP Program
from resuming for a considerable time. In light of Alliacense's poor track record of
achieving MMP licenses in the last year, and these difficulties recently encountered, that
risk continues and is significant.
9. Patriot reiterates that Dan Leckrone really needs to be ordered not to be
involved in the debtor at all after confirmation, which is the spirit if not the letter of the
Plan. Further, the Plan should not be considered for confirmation until the two lists are
presented to Patriot under the provisions of July 2014 Agreement and Alliacense confirms
Case: 13-51589 Doc# 577 Filed: 10/10/14 Entered: 10/10/14 15:32:28 Page 3 of
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