Medical marijuana firm Liberty Health Sciences Inc. and its investors asked a federal judge in New York to grant preliminary approval to a settlement resolving self-dealing allegations.
The cash deal “returns almost 8.4% of estimated damages using the low end of damages models,” investors told the U.S. District Court for the Southern District of New York. Liberty Health investors accused the company of misleading them about the value of some shell company investments it made that allegedly benefited corporate insiders.
The recovery amount is “above settlements for similar securities class actions,” based on research and past settlements from 2016 and before, according to an investor memo in support of preliminary settlement approval.
Pomerantz LLP, lead counsel for the proposed class, will ask for up to one-third of the settlement amount—$600,000—in attorneys’ fees, the Jan. 8 memo said. The firm also plans to ask for an unspecified amount as “reimbursement of reasonable expenses.”
Judge Mary Kay Vyskocil on Monday terminated Liberty Health’s pending motions to dismiss in light of the settlement, according to a docket entry.
Perkins Coie LLP represented Liberty Health, which denied any wrongdoing.
The case is Lin v. Liberty Health Scis. Inc., S.D.N.Y., No. 1:19-cv-00161, preliminary settlement approval documents filed 1/8/21.