Labaton Keller Sucharow LLP Announces Proposed Settlement on Behalf of Purchasers of Lordstown Motors Corp. Securities - RIDE RIDEW

Rhea-AI Summary

Labaton Keller Sucharow LLP announces approval of proposed settlement benefiting Lordstown Motors Corp. purchasers involving securities violations.

Insights

Legal Expert

The approval of a settlement class and proposed settlement in a securities litigation case such as the one involving Lordstown Motors Corp. typically signifies the nearing end of a complex legal battle. The allegations of violations of Sections 10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934 suggest claims of securities fraud, misleading disclosures and issues with control person liability. The settlement's approval process involves assessing whether it is fair, reasonable and adequate for the affected class members.

From a legal standpoint, the creation of a Settlement Fund with a minimum of $3 million and additional funding up to $7 million is a significant financial commitment. The fund's size reflects the severity of the alleged misconduct and the potential damages incurred by the claimants. The distribution plan for the Net Settlement Fund will be scrutinized to ensure equitable compensation for the damages suffered by the class members.

For investors and stakeholders, the resolution of such litigation removes a degree of uncertainty and potential financial liability from Lordstown Motors Corp. However, it's worth noting that the litigation will continue against other defendants, which implies ongoing legal costs and potential further settlements or judgments.

Financial Analyst

The establishment of a settlement in a high-profile bankruptcy case has direct financial implications for investors of Lordstown Motors Corp. The earmarked settlement fund represents a non-operating expense that will impact the company's financial statements and could influence investor perception. The funding of the settlement may affect the company's cash reserves or require financing, which could alter its capital structure or financial strategy.

Moreover, the resolution of the litigation may lead to a re-evaluation of the company's stock by the market. While the settlement may be seen as a step toward stability, the ongoing litigation against other defendants suggests that the company is not entirely out of the woods, which could temper investor enthusiasm. Future financial performance and the ability to attract additional capital may hinge on the final outcomes of the remaining legal challenges.

It is also important to consider the long-term reputational impact on Lordstown Motors Corp. Settlements of this nature can be double-edged swords; they can remove legal overhangs but also potentially affirm allegations of past wrongdoing, which might influence future partnerships, customer trust and overall brand image.

Market Research Analyst

The settlement announcement in the context of Lordstown Motors Corp. provides a lens into the broader electric vehicle (EV) industry, where investor scrutiny and market confidence are paramount. As EV companies often rely on forward-looking statements to attract investment, allegations of misleading information can have ripple effects across the sector.

Understanding investor sentiment and market trends is important in this situation. The market's reaction to the settlement could serve as an indicator of the EV industry's risk tolerance and the importance placed on corporate governance. A swift recovery in Lordstown's stock price post-settlement could signal market confidence in the sector's growth prospects despite individual company setbacks.

Additionally, the outcome of this case may influence the regulatory landscape, potentially leading to stricter disclosure requirements for publicly traded EV companies. This could affect how these companies communicate with investors and the market, ultimately shaping investment strategies and market dynamics in the EV sector.

WILMINGTON, Del., April 5, 2024 /PRNewswire/ -- Labaton Keller Sucharow LLP announce that the United States Bankruptcy Court for the District of Delaware has approved the following announcement of a proposed settlement that would benefit purchasers of Lordstown Motors Corp. (NASDAQ: RIDE) (NASDAQ: RIDEW):

SUMMARY NOTICE OF CERTIFICATION OF SETTLEMENT CLASS AND PROPOSED SETTLEMENT

If you purchased the publicly traded securities of Lordstown Motors Corp. ("LMC") during the period from August 3, 2020 through July 2, 2021, and/or held LMC's publicly traded Class A Common Stock on September 21, 2020, and were damaged thereby, you may be entitled to a payment from a settlement.

YOU ARE HEREBY NOTIFIED, by Order of the U.S. Bankruptcy Court for District of Delaware ("Bankruptcy Court"), that the Court-designated Class Representative, on behalf of himself and all members of the Ohio Settlement Class, and LMC and its subsidiaries (together, the "Debtors"), have reached a proposed settlement of all claims against certain of the Debtors and David Hamamoto ("Settling Defendants") asserted in the action, In re Lordstown Motors Corp. Sec. Litig., No. 4:21-cv-00616 (N.D. Ohio) ("Ohio Securities Litigation"), which were also asserted against certain of the Debtors in the above-captioned Chapter 11 Cases, as well as releases to other directors and officers of the Debtors who were serving in such roles as of December 12, 2023 but who are not defendants in the Ohio Securities Litigation (such directors and officers, together with the Settling Defendants, the "Released Parties"). On March 6, 2024, the Bankruptcy Court entered an order confirming the Debtors' Third Modified First Amended Joint Chapter 11 Plan of Lordstown Motors Corp. and Its Affiliated Debtors (together with all schedules and exhibits thereto, and as the same may be modified in accordance with its terms, the "Plan") and preliminarily approved the proposed Settlement and certified the Ohio Settlement Class pursuant to Federal Rule 23, made applicable by Bankruptcy Rule 7023.

If the Settlement is approved on a final basis, the Settlement will provide releases and resolve claims in the Ohio Securities Litigation alleging that the Settling Defendants violated Sections 10(b), 14(a), and 20(a) of the Securities Exchange Act of 1934. The Settlement will be implemented in accordance with the provisions of the Plan, which provide for the creation of a Settlement Fund in the amount of at least $3 million, and subsequent additional funding of up to $7 million, for the benefit of the Ohio Settlement Class. The Ohio Securities Litigation will continue to proceed with respect to all other defendants.

The Bankruptcy Court has scheduled a final hearing before the Honorable Mary F. Walrath, remotely via Zoom, on June 11, 2024, at 10:30 a.m. (prevailing Eastern Time), Courtroom 4, 824 N. Market Street, 5th Floor, Wilmington, DE 19801 (the "Settlement Hearing") to determine whether the Bankruptcy Court should: (i) approve the proposed Settlement, as fair, reasonable, and adequate; (ii) approve the proposed Plan of Allocation for distribution of the Net Settlement Fund; and (iii) approve Ohio Class Counsel's motion for payment of attorneys' fees and expenses from the Settlement Fund. The Bankruptcy Court may change the date of the hearing without providing another notice. You do NOT need to attend the Settlement Hearing to receive a payment.

IF YOU ARE A MEMBER OF THE OHIO SETTLEMENT CLASS, YOUR RIGHTS WILL BE AFFECTED BY THE PROPOSED SETTLEMENT AND YOU MAY BE ENTITLED TO A PAYMENT. If you have not yet received a Postcard Notice, you may obtain copies of the Postcard Notice, the long-form Notice, and the Ohio Claim Form by visiting the Ohio Settlement Claims Administrator's website, www.strategicclaims.net/lordstown/, or by contacting the administrator at: Lordstown Bankruptcy Settlement, c/o Strategic Claims Services, 600 N. Jackson Street, Suite 205, Media, PA 19063, info@strategicclaims.net, (866) 274-4004. Inquiries, other than requests for information about the status of a claim, may also be made to Ohio Class Counsel: Jake Bissell-Linsk, Esq., Labaton Keller Sucharow LLP, 140 Broadway, New York, NY 10005, www.labaton.com, settlementquestions@labaton.com, (888) 219-6877.

If you are a member of the Ohio Settlement Class, to be eligible to share in the distribution of the proceeds from the Settlement, you must submit an Ohio Claim Form postmarked or submitted online no later than July 20, 2024 to the Ohio Settlement Claims Administrator. If you are a member of the Ohio Settlement Class and do not timely submit a valid Ohio Claim Form, you will not be eligible to share in the distribution of the proceeds from the Settlement, but you will nevertheless be bound by the terms of the Settlement, the Confirmation Order, and the Plan, including the releases set forth therein. 

If you are a member of the Ohio Settlement Class and wish to exclude yourself from the class, you must submit a written request for exclusion in accordance with the instructions in the Notice so that it is received no later than May 21, 2024 by the Ohio Settlement Claims Administrator. If you exclude yourself from the Ohio Settlement Class, you will not be eligible to share in the distribution of the proceeds of the Settlement. Exclusion is the only option that potentially may allow you to pursue individual claims against the Released Parties. With respect to the Debtors, your ability to bring claims against them may be limited by the Plan and whether you timely filed an individual claim in the Chapter 11 Cases.

Any objections to the proposed Settlement, the Plan of Allocation, and/or Ohio Class Counsel's motion for attorneys' fees and expenses must be filed with the Bankruptcy Court, either by mail or in person, and be mailed to counsel in accordance with the instructions in the Notice, such that they are received no later than May 21, 2024 by the Bankruptcy Court, Ohio Class Counsel, and Debtor's Counsel Representative.

PLEASE DO NOT CONTACT THE COURT, DEBTORS, OR
DEBTORS' COUNSEL REGARDING THIS NOTICE.

DATED: APRIL 5, 2024

BY ORDER OF THE U.S. BANKRUPTCY
COURT - DISTRICT OF DELAWARE

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SOURCE Labaton Keller Sucharow LLP

FAQ

Who announced the proposed settlement benefiting Lordstown Motors Corp. purchasers?

Labaton Keller Sucharow LLP announced the proposed settlement.

What is the ticker symbol for Lordstown Motors Corp.?

The ticker symbol for Lordstown Motors Corp. is RIDE.

What violations are alleged in the Ohio Securities Litigation against the Settling Defendants?

The violations alleged in the Ohio Securities Litigation against the Settling Defendants include Sections 10(b), 14(a), and 20(a) of the Securities Exchange Act of 1934.

What is the amount of the Settlement Fund for the Ohio Settlement Class?

The Settlement Fund for the Ohio Settlement Class is at least $3 million, with potential additional funding of up to $7 million.

When is the final hearing scheduled before the Bankruptcy Court regarding the proposed Settlement?

The final hearing before the Bankruptcy Court regarding the proposed Settlement is scheduled for June 11, 2024, at 10:30 a.m. Eastern Time.