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Calling all lawyers…

Typically, laundry lists of legal disclosures are the types of things you see at large tobacco or chemical companies. But a small Connecticut-based company called Competitive Technologies (CTT) is proving that legal woes aren’t just for the big boys. In the K it filed late yesterday, the list of lawsuits is impressive and is clearly keeping lots of lawyers busy. Though the company doesn’t disclose all the legal fees involved, one case involving two former employees who filed under Section 806 — otherwise known as the “whistleblower protection act” — generated nearly $800K in legal bills. Though the company appears to have won the case, it’s still a lot of cash given that it’s market cap is around $37 million.

Unfortunately, that’s probably only the tip of the iceberg, given the other lawsuits going on. One involves Palatin Technologies (PTN), another small cap that CTT claims violated a contract. Though the companies settled, CTT now claims that one component of the settlement — 170,000 shares of Palatin stock — were given as restricted shares, instead of shares that could be sold. Then there’s another former employee who’s also suing under the whistleblower provisions. And an SEC civil suit charging the company and its former CEO with stock manipulation.

The bottom line is that not only are all of these lawsuits expensive, but keeping up with them has to be a substantial diversion for CTT’s current executives and board.