The proposed $2.3 million settlement agreement in a derivative suit challenging the merger that created Lightning eMotors was approved by a federal court in Colorado, Bloomberg reports
The merger has spawned numerous lawsuits. The settlement order, signed by Judge Nina Y. Wang of the US District Court for the District of Colorado, applies to three of them. The settlement establishes a $1.85 million escrow account to be used for the defense or settlement of a securities class action against the company and includes an additional $500,000 for attorneys’ fees.
Lightning eMotors was acquired by GigCapital3 in May 2021, one of a wave of e-vehicle industry companies taken public through blank-check mergers.
The plaintiffs alleged the defendants overstated the company’s financial position after it went public through the SPAC deal.
Lightning eMotors completed its deal with the SPAC in May 2021, receiving approximately $268 million in gross proceeds, including a $125 million PIPE.
Shares at the time of the company’s debut on the NYSE were trading at $172.80. Lightning eMotors has since plunged into penny-stock territory, last trading today at 5 cents a share. Read more.
