A series of proposed securities class actions, which alleged disclosure failings by a cannabis company, Wayland Group Corp., has been settled for $8 million.
Earlier this year, the Ontario Superior Court of Justice certified a trio of proposed class actions against the company (which was formerly known as Maricann Group Corp.), several former directors and officers, as well as its underwriters, Canaccord Genuity Corp. and GMP Securities L.P, over allegations that investors were misled by the company’s disclosures about its expansion plans between late 2017 and August 2019.
The court initially certified the proposed class actions to facilitate a single, joint settlement, which has now also been approved by the court.
Under the settlement, investors will receive $8 million, minus $2.4 million in legal fees and expenses (plus disbursements and tax).
In approving the proposed settlement, the court said the deal was reached following extensive, arm’s length negotiations, after more than five years of litigation.
“The resolution of these actions on the terms contained in the settlement agreement achieves certainty for all parties involved, and does so in a timely way that avoids protracted legal proceedings,” the court said. “It is a very good result and is in the best interest of the class members.”
According to the court’s decision, the three cases alleged that “Wayland misrepresented material facts regarding its business, capital structure, finances, operations, and in particular, the build-out of its cannabis production facility” in Langton, Ont.
Ultimately, the company corrected its disclosure, but trading in its securities were halted and ended up being delisted — and the company had to file for creditor protection.
The settlement doesn’t include an admission of liability by any defendant, it noted.
Additionally, Wayland’s former CEO, Benjamin Ward, is excluded from the deal. Ward, “is in default and is the subject of a separate motion for default judgment,” the decision noted.
The deadline for investors to make a claim to share in the settlement is Aug. 20