Our position is that this contract exists in BTC world. We're obviously (all of us) still working out how BTC world contracts work. The demand is obviously nonsense, nobody has the authority to award damages in BTC world, so the point is factually moot.
To the extent that they would not be enforceable in whole or in part in the real world, Bitcoin contracts pretty much exist only by mutual consent. I know that everyone likes to take the "Wild West, different rules, blah, blah, blah" line but I think that doing so not only leads to absurd over-valuations, it also encourages total paralysis when shit goes wrong and to some extent it discourages realistic recovery arrangements.
I think that Patrick's real world occupation and his experience in the energy derivatives market created a perception that he was or should have been aware of the strong possibility of correlated risk to a far greater extent than the other PPT operators. I think that people made the assumption that "Patrick knows what he's doing" in large part
because of his extensive experience in high risk markets where correlated risk has caused spectacular collapse in the past (Enron anyone?).