Updates.
On February 9, 2024, the initial case management conference with the Court transpired. The Plaintiff issued an Amended Statement of Claim containing new facts; and the Court scheduled Li-Cycle Holdings Corp.’s (“Li-Cycle”) motion to stay the proceeding under the legal doctrine “forum non conveniens” for August 2, 2024. The non-U.S. investors will be vigorously opposing this motion and look forward to having the Court uphold the proposition that Ontario-based responsible issuers must me responsible to violations of the Ontario Securities Act.
Overview of this Proceeding.
Li-Cycle conducts business across North America and Europe. Li-Cycle is a reporting issuer for purposes of Ontario securities laws and subject to the continuous disclosure requirements of the Ontario Securities Act.
Li-Cycle reports itself as a leading global lithium-ion battery resource recovery company and North America’s largest pure-play lithium-ion battery recycler, with a rapidly growing presence across Europe. Li-Cycle seeks to recover critical battery grade materials to create a domestic closed-loop battery supply chain for a clean energy future.
On February 27, 2023, Li-Cycle published a news release that it had received a conditional commitment for a $375 million loan from the Department of Energy (“DOE”), i.e., the DOE Loan, to build-out the Rochester Hub. Li-Cycle negligently omitted what conditions the DOE required before Li-Cycle would receive the DOE Loan.
Thereafter and until October 23, 2023, Li-Cycle reported additional bullish material facts about the DOE Loan and status of the build-out of the Rochester Hub. Li-Cycle did not report or publish any additional material facts about the conditions or the status of the DOE Loan, cost-overruns into the hundreds of millions, or problems with engineering designs and property owners.
On October 23, 2023, Li-Cycle published a news release reporting that it would halt construction of its Rochester Hub Project pending a comprehensive review. Li-Cycle expressly blamed the decision on “escalating construction costs”, which was followed by a Material Change Report. The market impact of this public corrective statement caused the price of Li-Cycle’s shares to diminish from $2.27 down to $1.23, or a drop of 66%.
On November 13, 2023, Li-Cycle released its Q3 2023 financial statements and MD&A and disclosed further negative material facts about the halt of the Rochester Hub Project. The market impact of this corrective statement caused the price of Li-Cycle’s shares to further diminish from $1.56 down to $0.89, or a drop of 42%.
The Plaintiff investor and putative Class of investors suffered a foreseeable economic loss from the market impact of the Public Corrective Disclosures contradicting the material fact statements released within the Impugned Documents. The “Class” means all persons, other than Excluded Persons, who acquired Li-Cycle’s common shares during the Class Period and who held some or all of those common shares until after the release of at least one of the Public Corrective Disclosures.
Investors’ Counsel: Berger Montague (Canada) PC
Court Filing Number: CV-23-00710373-00CP
Motion Judge: Madam Justice Akbarali