Aphria Inc. has agreed to pay $30 million to settle a class-action lawsuit by shareholders alleging the company made misrepresentations to capital markets in 2018.
The settlement agreement said the deal is not an admission of liability by Aphria or the individual defendants, who denied all allegations.
The lawsuit alleged Aphria made misrepresentations in 2018 in connection with its acquisition of a company called Nuuvera Inc. and another deal for a company called LATAM Holdings Inc. that suggested their value was significantly higher than their actual worth.
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It alleged that a substantial drop in Aphria’s share price following certain public disclosures that year amounted to a public correction of misrepresentations.
Aphria was acquired by Tilray Inc. in 2021.
In a regulatory filing, Tilray noted the payment will be primarily funded by an Aphria insurance policy and by the individual defendants. Aphria will fund the remaining unpaid portion estimated to about $8.5 million.
“Aphria’s portion of the settlement amount is fully accrued on its balance sheet and the settlement amount will not result in a negative impact to earnings,” Tilray said.
The settlement requires court approval. A hearing at the Ontario Superior Court is set for March 26.
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