The lithium class action lawsuit is brought on behalf of Piedmont Lithium Inc. and certain of its senior executives with violations of the securities act of 1934 and seeks to collectively represent prospective buyers of Piedmont Lithium common stock between March 16,2018 and July 19,2019, inclusive (the “Closing Date”). On March 16, 2018, the New York Stock Exchange announced that Piedmont Lithium had filed a supplemental filing with the SEC charging the company with three violations of the securities act that took place between March and December, inclusive. As previously reported, these three violations included improper pledging of stocks (which was considered improper under the applicable federal securities laws); failure to provide notice of an acquisition of debt of an outstanding capitalized option or right (which was considered improper under applicable federal securities laws as well as applicable state securities laws).
Accordingly, on July 20, 2018, the New York Stock Exchange delisted Piedmont Lithium from its list of publicly-listed companies. However, on September 8, 2018, the company was added back to the NYSE (the Pink Sheets) under the symbol “PLY.” Consequently, the Lithium Class Action Lawsuit has been filed on behalf of Piedmont Lithium Inc and its officers, directors and shareholders by plaintiff attorneys, all of which are named in the complaint. Additionally, as noted above, the company is also a defendant in the New York State Securities Exchange Commission (SEC) and West Virginia Attorney General’s Office v. Piedmont Lithium, et al.
Assuming the above discussion is not enough to alert you to the likelihood that you are a potential lead plaintiff in the lithium market lawsuit, it is nonetheless necessary for you to be aware of the potential limitations upon your ability to sue. First, you must recognize that a claim against an entity generally cannot exceed $10 million unless the statute of limitations is at least five years. (Although we note that this limitation could be raised in either of the Lithium Class Action Lawsuit lawsuits discussed herein, if so we expect that you will exhaust that avenue of attack first.) Second, even if the underlying cause of the lawsuit is that a member of the corporation colluded with a third party to artificially inflate the price of Lithium at which point the company became insolvent, under New York law it may only be held within the insolvent business’s insolvency estate, unless it can be proven that the defendant had knowledge of the scheme (e.g., that the trustee of the Insolvency Estate knew of the scheme or that the trustee knew of or observed an instance when the defendant had a fiduciary duty to the Insolvency Estate). Third, although the law does not require it, you should also understand that the statute of limitations does not run in circumstances where the company’s board of directors did not act in the best interest of the Insolvency Estate, or if there was a misrepresentation by the board.
The amended complaint in the lithium class action lawsuit alleges a number of deceptive acts by defendants. First, defendant Goldwater Energy Inc. falsely stated in its annual reports that the company had experienced year-over-year growth in revenues during the three most recent years. It further reported that despite its continued revenue growth, despite increasing demand from commercial customers, its gross profit margins declined from late last year. Finally, in the third quarter of 2018 and throughout the third and fourth quarters of 2021, defendant Metco Landscape LLC negligently caused the death of lead plaintiff Kalitha mitigation D.M. The complaint further claims that defendants failed to warn D.M. of the dangerous condition of her home and that it was not safe for her to return home that night.
At this point, we would like to add that we have not been able to determine whether or not the representations were material or non-material to the result of a lawsuit. Therefore, at this point, plaintiffs must move forward on their claim that defendants made false and misleading statements and failed to warn them of the foreseeable dangers associated with the use of their chemical, among other things. As we have previously noted, as the class action lawsuit moves forward, plaintiffs are encouraged to seek expert advice regarding whether they have a case against defendants herein. Plaintiffs should consult with their attorneys to determine if there is merit to their claims.