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In the bizarre climax of a four-year legal dispute over stock options, next-generation battery developer QuantumScape has moved to seize the home of its former chief strategy officer to cover $1.1 million in lawyer fees it says it racked up in the case.

The move—which could allow the company to force the sale of industry veteran Bart Riley’s five-bedroom home in Weston, Mass.—stems from QuantumScape’s 14-year-old effort to develop a lithium-metal battery to power electric vehicles.

Riley joined QuantumScape as its 27th employee in 2012, leading the design of its battery. But in 2016, then-CEO Jagdeep Singh fired him. As part of the separation agreement, QuantumScape gave Riley a consulting contract that allowed him to keep one-quarter of his vested options, which he estimated would have been worth $24 million in 2021, a few months after QuantumScape went public.

In 2020, however, just before QuantumScape announced its coming public listing, Riley learned that his contract had lapsed the previous year, invalidating his options. In 2021, Riley filed a complaint with an arbitrator—as he was required to do under the agreement—claiming that QuantumScape was supposed to notify him if it wasn’t renewing his contract so he had a chance to exercise his options. The company replied that it had met its contractual obligations, and an arbitrator and two federal courts have ruled in its favor. Most recently, the Ninth Circuit Court of Appeals in San Francisco on March 1 denied Riley’s claim, affirming a U.S. District Court ruling that also ordered Riley to pay $1.1 million in attorney’s fees, costs and interest that QuantumScape says it accumulated fighting his lawsuit.

On Aug. 5, a Massachusetts state judge granted a motion allowing QuantumScape to attach Riley’s home to cover its legal fees, according to court documents. If Riley cannot come up with the money by Aug. 31, the order allows QuantumScape to seek a forced public auction of the house to cover its legal bills. Riley would receive whatever is left over. The 5,000-square-foot house, which sits on 2.9 acres of land, is worth more than $2.5 million, according to online real estate websites.

The dispute reflects the central place options hold in Silicon Valley, where they can account for much of an employee’s compensation. Startups typically attract employees with lavish option grants; most startups fail, but when they succeed, those options can be worth millions.

Still, options disputes are usually settled well before they reach an arbitrator or a courtroom, according to Patrick Hammon, a financial, civil litigation and intellectual property lawyer with Pillsbury Winthrop Shaw Pittman in Palo Alto, Calif. Hammon said he had never heard of an options dispute resulting in someone’s home being seized. "When you’re dealing with an executive where there’s already some concern about bad publicity, where there should be a recognition that we may be doing business with that same person or need that person in the future, it does seem a little bit aggressive,” Hammon said.

In Riley, QuantumScape had hired one of the best-known figures in the then-nascent U.S. battery industry. In 2001, Riley co-founded A123 Systems along with Yet-Ming Chiang, a professor at Massachusetts Institute of Technology. The company developed one of the world’s first commercial lithium-iron-phosphate batteries, today the world’s most prevalent EV battery.

By 2009, A123 was a Wall Street darling, and it conducted the largest initial public offering of that year. Those heady days were short-lived. In 2012, Fisker Automotive recalled its EVs containing A123’s batteries over a mechanical issue, forcing cash-strapped A123 into bankruptcy.

Shortly after, QuantumScape hired Riley on a half-time contract, granting him options on 1% of the company’s shares to run its research and development effort. I knew him at the time, and he was much in demand to consult for battery startups.

Over the next four years, QuantumScape developed its battery much as it is today, with a separator made of lithium lanthanum zirconium oxide allowing for the safe use of highly volatile lithium metal. The battery also employs a design known as “anodeless,” in which the battery self-creates the anode, eliminating the need for a lot of expensive conventional factory equipment.

Riley said that tension built between him and Singh, then CEO and now company chair. QuantumScape declined to comment.

In the separation agreement, contained in court documents, Riley agreed not to poach QuantumScape employees, disparage the company publicly or work for a direct competitor. He also agreed to be available for any questions the company might have about the technology. In exchange, Singh granted him 25% of his vested options for a six-year period. According to Riley, Singh said the board would not agree to a six-year contract, so he would be given a two-year contract, followed by a series of one-year renewals.

In late 2018, QuantumScape extended Riley’s contract for a year. But in August 2020, Riley realized he had not received the second extension, due eight or nine months earlier. He contacted a QuantumScape executive, who told him the company would work through how to proceed, Riley said.

In September 2020, QuantumScape announced it was going public. Riley said he again contacted the company, which now told him it would not renew or honor the lapsed contract. Instead, it offered 15,000 to 20,000 restricted stock units—10% of what he had been promised in the separation letter.

In February 2021, Riley filed for arbitration, saying the offer was not “fair in light of his agreement with the company when he left and his contributions to the company’s success.”

The crux of Riley’s claim was that, according to the separation agreement, the company had to give him 14 days’ notice in writing if it wanted to terminate the arrangement, and that it had not done so. The company replied that the one-year contract renewal, which expired on Dec. 31, 2019, served as notice that the agreement would terminate. The arbitrator agreed with the company, as did two federal courts to which Riley appealed.

I had been speaking with Riley for months about his pursuit of what he considered unfairly lost options. But last weekend, he left a phone message with a more urgent tone—it was about the attachment order. In a subsequent conversation, he said he didn’t have $1 million in cash and was scrambling to get it—potentially from a retirement account, a second home in Martha’s Vineyard or options from another startup with which he was involved.

“Their recourse if I don’t pay is to start a sheriff’s auction on my home, which would be sad since this is where I raised my kids,” he said. “But that’s the situation in terms of correspondence with the company—try and get them to be human beings.”

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Hundreds of thousands of Swifties expected in London for five sold-out shows at Wembley after last week’s foiled terror plot in Vienna

WEMBLEY, LONDON—Security officials in London are ramping up preparations ahead of Taylor Swift’s five-night run at Wembley Stadium, with a ban on fans outside the venue and a heightened threat level following the foiled terror plot in Vienna last week.

Wembley will have more visible security personnel this week, extra video surveillance and hardened cybersecurity, according to experts. Scanners, fencing and bollards are being installed around the perimeter of the stadium. The latest leg of the singer’s global Eras Tour kicks off in the city Thursday.

Increased security measures at the 90,000-capacity venue were being readied after authorities in Austria arrested three teenage suspects over plans to drive a bomb-filled car into crowds outside the Ernst Happel Stadium. The plot forced the cancellation of three Swift shows scheduled to take place at the venue.

“A foiled terrorist plot absolutely heightens the threat and the risk of something happening,” said Noah Price, a director at G4S, the company responsible for delivering security for the London 2012 Olympic Games. As a result, organizers would be re-evaluating security protocol and procedures, he said.

A challenge for security officials involves the thousands of Swift fans who travel to her shows without tickets, to celebrate outside venues, sing and trade friendship bracelets, known as “Tay-gating.”

“Tay-gating adds a whole new dynamic so they’re having to extend their security perimeter beyond the stadium,” Price said.

Wembley has told Swifties not to travel to the stadium without a ticket, warning that fans won’t be allowed to stand or gather outside the venue. Tens of thousands of fans packed a hill overlooking Munich’s Olympic Stadium during a Swift show last month.

“No one is allowed to stand outside any entrance or on the Olympic Steps at the front of the stadium,” the venue said in a statement Tuesday. “Non ticket holders will be moved on.”

The increased security didn’t deter Jessica Johns from making the journey from Nevada for Friday’s show.

“We’ve been planning this for so long, there was nothing stopping us,” said Johns, a 37-year-old bartender from Las Vegas who landed in the U.K. earlier this week.

“They’re clearly beefing up security after Vienna so it will be fine,” she said.

Traveling with two friends, Johns said the group were treating their trip like a pretend bridal shower.

“We’ve bought each other gifts and even have T-shirts for each day,” she said. One of the group ditched social media for the past year to avoid spoilers ahead of the show.

Swift, who played three sold-out shows at Wembley in June, didn’t comment on the Vienna plot but has in the past talked about her fears of an attack at one of her concerts.

“I was completely terrified to go on tour,” she said in a 2019 Elle magazine article, referencing two 2017 incidents: the bombing at an Ariana Grande concert that killed 22 people in Manchester, northern England, and the shooting at a Las Vegas music festival where dozens died.

“There was a tremendous amount of planning, expense, and effort put into keeping my fans safe,” she said, adding that she started carrying around army-grade bandage dressings to control bleeding from gunshot or stab wounds.

Security discussions usually involve the artist because they want to safeguard their brand and avoid liabilities, said Don Erickson, the chief executive of the U.S.-based Security Industry Association, a trade group representing more than 1,500 security technology companies.

“They’re not in the dark,” Erickson said. “They may not have all the threat intelligence but are going to understand what security protocols look like on site.”

The Manchester bombing, which Islamic State claimed responsibility for, resulted in a sea change for large scale events in the U.K., with counterterrorism advice now sought as a matter of course.

Many lessons have been learned since the Manchester attacks when suicide bomber Salman Abedi concealed himself in an area outside the perimeter of the arena and its security personnel, said Dr. David BaMaung, a security and counterterrorism expert who advised the public inquiry into the bombing.

“The inquiry found that the issue of risk assessments at the Manchester Arena was lacking,” BaMaung said.

The streets around the stadium Wednesday had a heavy security presence. Groups of committed fans were taking photos in front of the “Swiftie Steps,” a mural painted nearby. Access closer to the venue was restricted.

Ella Percy, a 21-year-old from Manchester, said the foiled Vienna attack was scary but that she still plans to go to the Tuesday show.

“I feel like if it wasn’t safe, it wouldn’t go ahead,” she said.

She has, however, canceled plans to sit outside Wembley the night before to listen to the music coming out of the stadium. “I don’t want to make it more difficult for security,” she said.

The U.K. authorities have been on high alert in recent weeks following a series of violent anti-immigration protests that have swept through several major cities and smaller towns in some of the worst unrest in more than a decade.

The protests were ignited in part by false rumors spread on social media that a knife attack, which left three children dead at a Swift-themed dance class in northern England last month, was perpetrated by an undocumented Muslim migrant.

Three years ago, thousands of ticketless soccer fans violently stormed security at Wembley before England’s European Championship final against Italy. Thousands more caused disorder on the main route leading up to the stadium.

A Netflix documentary called “The Final: Attack on Wembley” was released earlier this year chronicling the chaos.

A government review reported a series of serious security failures surrounding the event, which lead to a significant beefing up of security at the venue, with investment in improving turnstiles, securing entrance gates and installing extra CCTV outside the venue.

London’s Metropolitan Police moved to assure fans that the Swift concerts would be safe.

“London plays host to a significant number of very high profile events each year with millions of visitors having a safe and enjoyable experience,” a spokesperson said.

“There is nothing to indicate that the matters being investigated by the Austrian authorities will have an impact on upcoming events here in London,” the spokesperson added.

New technology may potentially bring billions of additional barrels of oil and gas within reach of producers

Chevron’s deepwater technology breakthrough

This week Chevron announced a technology breakthrough that could extend the production lifespan of the US Gulf of Mexico oil basin — and potentially bring billions of additional barrels of oil and gas within reach of producers globally.

The US oil major has begun pumping oil and gas at its $5.7bn Anchor deepwater project in the Gulf of Mexico using specialised equipment that can operate at ultra-high pressures, about a third higher than previously deployed in the industry.

It is the first of a new wave of projects under development using so-called 20K technology, which is capable of operating in deep water at 20,000 pounds of pressure per square inch, equivalent to the pressure exerted by 650 medium-sized bulldozers.

Anchor’s floating production unit is recovering oil from a reservoir six miles below the water surface, where temperatures are typically about 121C. Chevron contracted Transocean to drill the production wells and several oilfield service providers including Drill-Quip for the subsea wellhead system and NOV for pressure control equipment.

“The ability to do this and prove this [works] and have it qualified all the way through regulatory approvals is significant. We’ve demonstrated that it can be done,” Bruce Niemeyer, Chevron’s president of Americas exploration, told Energy Source.

The complex geology of the deepwater US Gulf of Mexico has long made it an important test bed for offshore technologies, which are later deployed at other deepwater locations around the world.

Niemeyer said Chevron would initially focus on deploying the latest ultra-high pressure technologies in the Gulf of Mexico before looking at other global opportunities.

“We have over 390 leases in the Gulf of Mexico and inside of that are some prospects that would have this same sort of requirement. We have to go through the assessment and exploratory phase of some of that before we would sanction a project in the future. But it now opens [the possibility of] those, where in the past, it wasn’t possible.”

Chevron expects its Gulf of Mexico production to increase 50 per cent to 300,000 net barrels of oil equivalent per day by 2026, which is roughly 10 per cent of its global production.

Analysts say deployment of the new 20K technology by other operators could reinvigorate production in the Gulf of Mexico, which accounts for about 15 per cent of US crude production. Production from the basin has flatlined since reaching a peak of 2mn barrels of oil equivalent per day in 2019.

Wood Mackenzie forecasts that 20K technology will unlock more than 2bn barrels of oil equivalent in the Gulf of Mexico that was previously unrecoverable.

“This really opens the door for more of these deepwater high-pressure discoveries to be brought on stream,” said Mfon Usoro, analyst at Wood Mackenzie.

Three other Gulf of Mexico projects under development are expected to deploy similar 20K deepwater technology in the coming years — BP’s Kaskida, Shell’s Sparta and Beacon Energy’s Shenandoah. Wood Mackenzie forecasts the contribution from ultra-high pressure projects already under development will cause production to rise to 2.7mn barrels of oil equivalent per day by 2027.

Usoro said if these projects were all brought online successfully it would boost Gulf of Mexico production and provide opportunities in other deepwater locations such as Brazil, Nigeria and Namibia. A failure of the 20K technology would have a negative impact.

“Success in the play could extend the life of the basin,” said Usoro. “However, if results fall short, it could mark the beginning of production decline in the basin and a blow to a resurgence in exploration for additional barrels.”

The biggest risk in implementing deepwater technologies is safety, a point underlined by a well blowout at the Deepwater Horizon drilling rig in the Gulf of Mexico in 2010 that was operated by BP. The disaster killed 11 workers and caused immense environmental damage that has cost the company more than $65bn so far.

Niemeyer said Chevron’s 20K technology was “safe to deploy” and had gone through rigorous testing.

“This equipment was designed. It was tested and it was qualified and ultimately signed off by the regulator. And so we’ve got high confidence in it because of the very disciplined process that we’ve gone through.” (Jamie Smyth)

Biden administration claims victory in talks to cut prices of 10 key medicines

Legislation allowing the US government to negotiate lower drug prices will save Americans $7.5bn in its first year, the White House has said after it announced deals with pharmaceutical groups to cap prices on 10 of the most expensive medicines.

Price caps introduced in President Joe Biden’s Inflation Reduction Act will reduce net spending for the Medicare health insurance programme by 22 per cent, or $6bn, it said on Thursday following a year of negotiation with leading pharmaceutical groups including Johnson & Johnson and Merck.

Based on the costs of the 10 medicines last year, the pricing limits would also reduce out-of-pocket costs for patients on the federal health insurance programme by $1.5bn.

The ability to cap prescription drug costs by leveraging the government’s bulk purchasing power, which was introduced as part of President Biden’s Inflation Reduction Act, marks a significant policy victory for the Biden administration, and will be trumpeted by Kamala Harris in her effort to beat Republican rival Donald Trump in November’s presidential election.

Harris, who has pledged to “take on Big Pharma” at campaign rallies, said she had been “proud to cast the tiebreaking vote” that allowed the IRA to pass the Senate two years ago.

“Today’s announcement will be life-changing for so many of our loved ones across the nation, and we are not stopping here,” she added. Harris and Biden are expected to hold a campaign event on Thursday in Maryland to highlight the success of the reforms.

The group of drugs, targeted by the first negotiations, include cancer, heart disease and diabetes medications manufactured by 11 different drugmakers, some of which share rights to certain medicines. They collectively cost Medicare $50.4bn in gross expenditure excluding rebates and discounts last year, out of a total $120bn budget to cover 3,500 prescription drugs.

Since selecting the initial 10 drugs which will be subject to price caps from 2026 onwards, the US government has had to face more than a dozen lawsuits brought by companies and industry bodies opposing the new powers, some of which are ongoing. The reforms also cap out-of-pocket costs for Medicare patients at $2,000.

The savings to Medicare surpassed the initial projections of the Congressional Budget Office, which predicted that the reforms would save the programme $3.7bn in their inaugural year. The Centers for Medicare & Medicaid Services is expected to reveal more detailed price cuts affecting individual medicines before US markets open on Thursday.

Up to 50 more drugs, possibly including the blockbuster diabetes drug Ozempic, will be targeted across three rounds of price negotiations between now and 2027. The negotiations are expected to save the government $100bn over the next decade, according to the CBO.

From 2027, 20 additional drugs each year will be eligible for price negotiations. A drug’s eligibility is based on average price and competition.

The pharmaceutical industry has vociferously opposed the price controls, arguing that they will reduce funding for research and development.

Stephen Ubl, chief executive of industry lobbyist PhRMA, said the scheme was an attempt “to drive political headlines, but patients will be disappointed when they find out what it means for them”, adding that there are no assurances patients’ out-of-pocket costs will reduce as no controls have been placed on insurers.

Chris Boerner, chief executive of Bristol Myers Squibb, said last month on an earnings call that the reforms were “not good public policy”, adding that he was “very concerned about the long-term implications of [the] IRA on innovation”.

Boerner added that having seen the final price “we’re increasingly confident in our ability to navigate the impact of IRA on Eliquis”, a drug produced by BMS and Pfizer on which Medicare spent $16.4bn last year. Other drugmakers affected by the price controls, including AstraZeneca and Novartis, also struck a sanguine note on earnings calls about the reforms’ impact on revenues.

Type-2 diabetes medication, jointly manufactured by Eli Lilly and Boehringer Ingelheim; Johnson & Johnson’s anti-clotting drug Xarelto and Amgen’s autoimmune disease medication Enbrel are among those affected by the first round of price caps. As part of the Inflation Reduction Act, insulin costs were also capped at $35 a month.