A sign welcomes visitors to the General Motors Lordstown Complex, assembly plant in Warren, Ohio, U.S., November 26, 2018. REUTERS/Alan Freed
Labaton Sucharow client named lead plaintiff in class action against electric vehicle company
Lordstown Motors has faced questions about demand after going public via merger with a SPAC last year
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(Reuters) - Labaton Sucharow has been named lead counsel representing Lordstown Motors Corp investors in a lawsuit alleging the company misrepresented its production capacity and demand for its electric trucks.
U.S. District Judge Patricia Gaughan in Cleveland appointed the firm on Thursday after naming its client, investor George Troicky, the lead plainitff in the case because he had alleged more losses than others.
The company was one of several electric vehicle companies that went public via a merger with a special acquisition company (SPAC) over the past year.
Investors sued Lordstown and executives in March after a short seller accused the company of using "fake" orders to raise capital and claiming that its upcoming truck is three to four years away from production.
Lordstown has said it will vigorously defend against investor claims and that it is cooperating with the SEC.
Other law firms, including Robbins Geller Rudman & Dowd, Pomerantz and Glancy Prongay & Murray had sought lead status in the proposed class action, but represented clients with smaller losses, Gaughan said in her ruling.
The judge rejected a proposal by law firm Saxena White to have its client co-lead the case, saying it had not followed appropriate procedure.
Saxena had argued that Troicky, who first purchased shares in November, could not adequately represent investors in the DiamondPeak Holdings Corp SPAC who claim they were misled into approving its October merger with Lordstown.
The case is Rico v. Lordstown Motors Corp et al., U.S. District Court, Northern District Of Ohio, No. 21-cv-616.
For the class: Christopher Keller and Eric Belfi of Labaton Sucharow
For Lordstown: Douglas Greene and Douglas Shively of Baker & Hostetler
For investor Raymond Romano: David Kaplan of Saxena White
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