Defendants: iAnthus Capital Holdings Inc., Hadley Ford, and Julius Kalcevich.
Claims: Allegations of misrepresentations under Ontario Securities Act and common law oppression related to iAnthus Capital Holdings Inc., a cannabis company.
Facts:
Claims focused on misrepresentations in iAnthus's public statements between May 14, 2018, and March 9, 2020, and a corrective statement on April 6, 2020, regarding financial statement delays and potential wrongdoing by Hadley Ford.
The stock price dropped significantly following the corrective statement, with many class members losing their investment.
Settlement Proposal:
A $500,000 CAD settlement was proposed, with allocations for class counsel fees, an honorarium for the representative plaintiff, disbursements, and the claim administrator fee. This would leave a net fund of approximately $195,787.85 CAD for class distribution.
Issues for Consideration:
Fairness, reasonableness, and the settlement's alignment with class interests.
Approval of class counsel fees and a representative plaintiff honorarium.
Court's Analysis and Decision:
The court raised concerns about the settlement's adequacy compared to a similar U.S. settlement and the potential minimal recovery per class member.
Noted disparities between U.S. and Canadian settlements and the significant portion of iAnthus's trading volume occurring in Canada.
The absence of detailed evidence on investigation efforts, estimated class size and recovery per class member, and the explanation for the indemnity provided to individual defendants impacting the availability of a second insurance policy.
The court concluded that the plaintiff did not meet the burden of proving the settlement was in the best interests of the class, hence the settlement was not approved.
the court did not approve the proposed settlement. Therefore, there was no successful party in terms of the settlement approval process.
