UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
IN RE LOOP INDUSTRIES, INC.
Case No. 7:20-cv-08538-NSR
Case No. 7:20-cv-09031-NSR
NOTICE OF (I) PENDENCY OF CLASS ACTION AND PROPOSED SETTLEMENT; (II) SETTLEMENT FAIRNESS HEARING; AND (III) MOTION FOR AN AWARD OF ATTORNEYS’ FEES AND REIMBURSEMENT OF LITIGATION EXPENSES
A Federal Court authorized this Notice. This is not a solicitation from a lawyer.
Notice of Pendency of Class Action: Please be advised that your rights may be affected by the above-captioned securities class action (the “Action”) pending in the United States District Court for the Southern District of New York (the “Court”), if, during the period between September 24, 2018 and October 12, 2020, inclusive (the “Settlement Class Period”), you purchased or otherwise acquired Loop common stock on an open market located within the United States, including but not limited to the NASDAQ stock exchange or another domestic exchange, and were damaged thereby.
Notice of Settlement: Please also be advised that the Court-appointed Lead Plaintiffs, Sakari Johansson and John Jay Cappa (collectively, “Lead Plaintiffs”), on behalf of themselves and the Settlement Class (as defined in ¶ 20 in the Notice), have reached a proposed settlement of the Action for $3,100,000 in cash that, if approved, will resolve all claims in the Action (the “Settlement”).
PLEASE READ THIS NOTICE CAREFULLY. This Notice explains important rights you may have, including the possible receipt of cash from the Settlement. If you are a member of the Settlement Class, your legal rights will be affected whether or not you act.
If you have any questions about this Notice, the proposed Settlement, or your eligibility to participate in the Settlement, please DO NOT contact Loop, any other Defendants in the Action, or their counsel. All questions should be directed to Lead Counsel or the Claims Administrator (see ¶ 80 in the Notice).
Description of the Action and the Settlement Class: This Notice relates to a proposed Settlement of claims in a pending securities class action brought by investors alleging, among other things, that defendants Loop Industries, Inc. (“Loop” or the “Company”), Daniel Solomita, and Nelson Gentiletti (collectively, the “Individual Defendants” and, together with the Loop, the “Defendants”) violated the federal securities laws by making false and misleading statements regarding Loop and its technology. A more detailed description of the Action is set forth in paragraphs 11-19 in the Notice. The proposed Settlement, if approved by the Court, will settle claims of the Settlement Class, as defined in paragraph 20 in the Notice.
Statement of the Settlement Class’s Recovery: Subject to Court approval, Lead Plaintiffs, on behalf of themselves and the Settlement Class, have agreed to settle the Action in exchange for a settlement payment of $3,100,000 in cash (the “Settlement Amount”) to be deposited into an escrow account. The Net Settlement Fund (i.e., the Settlement Amount plus any and all interest earned thereon (the “Settlement Fund”) less (a) any Taxes, (b) any Notice and Administration Costs, (c) any Litigation Expenses awarded by the Court, and (d) any attorneys’ fees awarded by the Court) will be distributed in accordance with a plan of allocation that is approved by the Court, which will determine how the Net Settlement Fund shall be allocated among members of the Settlement Class. The proposed plan of allocation (the “Plan of Allocation”) is set forth in paragraphs 46-64 in the Notice.
Estimate of Average Amount of Recovery Per Share: Based on Lead Plaintiffs’ damages expert’s estimates of the number of Loop shares of common stock purchased during the Settlement Class Period that may have been affected by the conduct at issue in the Action and assuming that all Settlement Class Members elect to participate in the Settlement, the estimated average recovery per affected share (before the deduction of any Court-approved fees, expenses, and costs as described herein) is $0.31. Settlement Class Members should note, however, that the foregoing average recovery per share is only an estimate. Some Settlement Class Members may recover more or less than this estimated amount depending on, among other factors, when and at what prices they purchased/acquired or sold their Loop common stock, and the total number of valid Claim Forms submitted. Distributions to Settlement Class Members will be made based on the Plan of Allocation set forth herein (see paragraphs 46-64 in the Notice) or such other plan of allocation as may be ordered by the Court.
Average Amount of Damages Per Share: The Parties do not agree on the average amount of damages per share that would be recoverable if Lead Plaintiffs were to prevail in the Action. Among other things, Defendants do not agree with the assertion that they violated the federal securities laws or that any damages were suffered by any members of the Settlement Class as a result of their conduct.
Attorneys’ Fees and Expenses Sought: Plaintiffs’ Counsel, which have been prosecuting the Action on a wholly contingent basis since its inception in 2020, have not received any payment of attorneys’ fees for their representation of the Settlement Class and have advanced the funds to pay expenses necessarily incurred to prosecute this Action. Court-appointed Lead Counsel for Plaintiffs and proposed Settlement Class, Glancy Prongay & Murray LLP and Pomerantz LLP (“Lead Counsel”), will apply to the Court for an award of attorneys’ fees for all Plaintiffs’ Counsel in an amount not to exceed 33⅓% of the Settlement Fund. In addition, Lead Counsel will apply for reimbursement of Litigation Expenses paid or incurred in connection with the institution, prosecution, and resolution of the claims against the Defendants, in an amount not to exceed $140,000, which may include an application for reimbursement of the reasonable costs and expenses incurred by Lead Plaintiffs directly related to their representation of the Settlement Class. Any fees and expenses awarded by the Court will be paid from the Settlement Fund. Settlement Class Members are not personally liable for any such fees or expenses. Estimates of the average cost per affected share of Loop common stock, if the Court approves Lead Counsel’s fee and expense application, is $0.12 per affected share of Loop common stock.
Identification of Attorneys’ Representatives: Lead Plaintiffs and the Settlement Class are represented by Leanne H. Solish, Esq. of Glancy Prongay & Murray LLP, 1925 Century Park East, Suite 2100, Los Angeles, CA 90067, (310) 201-9150, firstname.lastname@example.org and Murielle J. Steven Walsh, Esq. of Pomerantz LLP, 600 Third Avenue, 20th Floor, New York, NY 10016, (212) 661-1100, email@example.com.
Reasons for the Settlement: Lead Plaintiffs’ principal reason for entering into the Settlement is the substantial immediate cash benefit for the Settlement Class without the risk or the delays inherent in further litigation. Moreover, the substantial cash benefit provided under the Settlement must be considered against the significant risk that a smaller recovery – or indeed no recovery at all – might be achieved after contested motions, a trial of the Action, and the likely appeals that would follow a trial. This process could be expected to last several years. Defendants, who deny all allegations of wrongdoing or liability whatsoever, are entering into the Settlement solely to eliminate the burden and expense of further protracted litigation.
 All capitalized terms used in the Notice that are not otherwise defined herein shall have the meanings ascribed to them in the Stipulation and Agreement of Settlement dated May 17, 2022 (the “Stipulation”), which is available on this website under Important Documents.
YOUR LEGAL RIGHTS AND OPTIONS IN THE SETTLEMENT:
SUBMIT A CLAIM FORM EITHER ONLINE OR POSTMARKED NO LATER THAN FEBRUARY 15, 2023.
This is the only way to be eligible to receive a payment from the Settlement Fund. If you are a Settlement Class Member and you remain in the Settlement Class, you will be bound by the Settlement as approved by the Court and you will give up any Released Plaintiffs’ Claims (defined in ¶ 29 in the Notice) that you have against Defendants and the other Defendants’ Releasees (defined in ¶ 30 in the Notice), so it is in your interest to submit a Claim Form.
EXCLUDE YOURSELF FROM THE SETTLEMENT CLASS BY SUBMITTING A WRITTEN REQUEST FOR EXCLUSION SO THAT IT IS RECEIVED NO LATER THAN DECEMBER 8, 2022.
If you exclude yourself from the Settlement Class, you will not be eligible to receive any payment from the Settlement Fund. This is, however, the only option that allows you to be part of any other lawsuit against any of the Defendants or the other Defendants’ Releasees concerning the Released Plaintiffs’ Claims.
OBJECT TO THE SETTLEMENT BY SUBMITTING A WRITTEN OBJECTION SO THAT IT IS RECEIVED NO LATER THAN DECEMBER 8, 2022.
If you do not like the proposed Settlement, the proposed Plan of Allocation, or the request for attorneys’ fees and reimbursement of Litigation Expenses, you may write to the Court and explain why you do not like them. You cannot object to the Settlement, the Plan of Allocation, or the fee and expense request unless you are a Settlement Class Member and do not exclude yourself from the Settlement Class.
ATTEND A HEARING ON JANUARY 5, 2023 AT 2:00 P.M., AND FILE A NOTICE OF INTENTION TO APPEAR SO THAT IT IS RECEIVED NO LATER THAN DECEMBER 8, 2022.
Filing a written objection and notice of intention to appear by December 8, 2022 allows you to speak to the Court, at the discretion of the Court, about the fairness of the proposed Settlement, the Plan of Allocation, and/or the request for attorneys’ fees and reimbursement of Litigation Expenses. If you submit a written objection, you may (but you do not have to) attend the hearing and, at the discretion of the Court, speak to the Court about your objection.
If you are a member of the Settlement Class and you do not submit a valid Claim Form, you will not be eligible to receive any payment from the Settlement Fund. In addition, unless you file a valid request for exclusion, you will remain a member of the Settlement Class, which means that you give up your right to sue about the claims that are resolved by the Settlement and you will be bound by any judgments or orders entered by the Court in the Action.