Lucid beats lawsuit claiming it defrauded SPAC buyers about manufacturing outlook

Jan 11 (Reuters) – Lucid Team Inc (LCID.O) on Wednesday gained the dismissal of a lawsuit accusing the luxurious electrical automobile maker of defrauding buyers within the special-purpose acquisition corporate that helped take it public, by way of considerably overstating its manufacturing outlook.

U.S. District Pass judgement on Yvonne Gonzalez Rogers in Oakland, California stated that regardless of media hypothesis, Churchill Capital Corp IV shareholders who introduced the proposed magnificence motion had no explanation why to grasp in early 2021 that the SPAC would merge with Lucid.

In consequence, she stated Lucid Leader Government Peter Rawlinson’s alleged deceptive statements on Feb. 5, 2021 on CNBC’s “Squawk at the Side road” may just now not were subject material to their selections to spend money on the SPAC.

“The court docket can’t conceive of the way plaintiffs may just fairly suppose a merger used to be most probably when Lucid and CCIV had now not even publicly stated {that a} merger used to be being thought to be,” the pass judgement on wrote.

Rawlinson had advised CNBC that his Newark, California-based corporate anticipated to provide 6,000 to 7,000 gadgets of its Air automobile in 2021, and had “already constructed” a manufacturing unit.

Churchill stocks fell 50% within the two days following the Feb. 22, 2021 merger announcement, wiping out an estimated $7.4 billion in worth, after Lucid stated it anticipated to provide simplest 577 gadgets and the manufacturing unit used to be now not constructed.

Rogers stated the Churchill shareholders had status to sue over statements made by way of a distinct corporate, Lucid, as a result of they alleged a “discernible” loss from “particular alleged misconduct.”

However she stated the pre-merger adjustments in Churchill’s inventory value, together with response to Rawlinson’s statements, mirrored “the general public’s belief of the chance of the merger, now not its exact probability. The latter is what issues.”

The merger raised about $4.4 billion for Lucid.

In Dec. 2021, Lucid won a U.S. Securities and Change Fee subpoena for paperwork associated with the merger. It has stated it’s been cooperating. The corporate started handing over the Air in Oct. 2021.

Attorneys for Churchill shareholders didn’t straight away reply to requests for remark. Lucid and its legal professionals didn’t straight away reply to identical requests.

The case is In re CCIV/Lucid Motors Securities Litigation, U.S. District Courtroom, Northern District of California, No. 21-09323.

Reporting by way of Jonathan Stempel in New York; enhancing by way of Diane Craft

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