Li-Cycle slapped with class action suit on behalf of shareholders

One of five law firms that have launched investigations into possible securities law violations by Li-Cycle has filed a class action suit in federal court.

Glancy Prongay & Murray filed the action, Davis v. Li-Cycle Holdings Corp., in the U.S. District Court for the Southern District of New York on Wednesday on behalf of persons and entities that acquired Li-Cycle securities between June 14, 2022, and Oct. 23 of this year.

The sudden halt of construction at Li-Cycle’s $485 million Rochester Hub in the town of Greece on Oct. 23 prompted several national law firms to seek shareholder comments and concerns. Five firms announced between Oct. 25 and Nov. 6 that they were looking into how actions of Li-Cycle impacted investors.

The class-action complaint by Los Angeles-based Glancy Prongay & Murray alleges that Li-Cycle executives “made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations and prospects.”

Li-Cycle is accused of concealing from shareholders: the escalating construction costs for the Rochester facility, that those costs “exceeded the expected aggregate cost of the project,” and that a temporary construction halt would be necessary.

The lawsuit alleges that Li-Cycle’s “positive statements about the company’s business, operations and prospects were materially misleading and/or lacked a reasonable basis.”

Following the company’s Oct. 23 public announcement of a construction pause due to escalating costs, stock plunged from a close of $2.27 on Oct. 20 to $1.23. As of Wednesday, the price climbed back to $1.84. The high-water mark of $13.85 came on Feb. 12, 2021.

Li-Cycle has said it will provide an update on how it intends to proceed with the Rochester Hub in its financial report on Monday.

The notice from Glancy Prongay & Murray says an investor has 60 days to “move the court to appoint you as lead plaintiff in this action.” To become a part of the class, investors are not required to opt in.

More information is available at glancylaw.com.

The halt at the Rochester site led to the layoff of 102 non-represented workers by construction contractor MasTec, and another 200 union workers were sent home.

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