New York-based Tilray Brands (Nasdaq: TLRY) (TSX: TLRY) celebrated the news on Wednesday that an $8 million shareholder lawsuit filed against it and subsidiary Hexo Corp. was dismissed after a Massachusetts Superior Court judge ruled that the plaintiffs in the case had not actually suffered a financial loss.
The plaintiff, Clement Italume, argued in the lawsuit that Tilray and Hexo “failed to properly disclose and notify shareholders of HEXO’s corporate actions in December 2022 and Tilray’s acquisition of HEXO in June 2023,” Tilray said in a press release.
Italume claimed that the lack of a notice “caused financial loss to shareholders” by using a reverse stock split, and the case was initially ordered into arbitration, according to the release.
But this week, the presiding judge ruled that Italume had not provided concrete evidence of financial harm due to the reverse stock split by which Tilray acquired Hexo, or that Tilray failed to properly notify shareholders of the acquisition deal.
It’s not yet clear if Italume will appeal the ruling, Tilray noted.
Tilray was in dire need of a win, or at least some financial relief. The company this month issued another 23 million shares of common stock in order to raise $14.6 million to help pay down some of its debts, and in February, Tilray agreed to settle two other lawsuits for C$30 million, or roughly US$21 million. And in its most recent financial quarter, Tilray reported a net loss of $85 million.
[[{“value”:”Tilray saved millions by getting the case dismissed, but the company is still in financial trouble.
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