UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Item 8.01. Other Events.
Spruce Power Holding Corporation (the “Company”) has previously reported that, on March 8, 2021, two putative class action complaints were filed in the federal district court for the Southern District of New York (the “Court”) against the Company and certain of its current officers and directors (the “Class Action Litigation”). The cases were consolidated as In re XL Fleet Corp. Securities Litigation, Case No. 1:21-cv-02171, a lead plaintiff was appointed, and an amended consolidated complaint was filed on July 20, 2021. The amended complaint alleges that certain public statements made by the defendants between September 18, 2020 and March 31, 2021 violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
On December 6, 2023, the lead plaintiff and the defendants entered into a Stipulation and Agreement of Settlement (the “Settlement Agreement”) to resolve the Class Action Litigation. On January 18, 2024, the Court preliminarily approved the proposed settlement as being fair, reasonable, and adequate, and scheduled a telephonic hearing for April 30, 2024 at 10:00 a.m. Eastern Time, to, among other things, consider whether to approve the proposed settlement.
Under the terms of the Settlement Agreement, the Company will pay an aggregate of $19.5 million to a settlement fund to settle all claims asserted in the Class Action Litigation, class counsel’s fees, and the costs of administering the settlement. The Settlement Agreement establishes procedures for the notification of claimants and the administration of the settlement. The settlement fund will be used to pay notice and administrative fees relating to the Class Action Litigation and to compensate those individuals who were class members during the applicable class period; no amount of the settlement fund will revert to the Company. The settlement fund will be managed by a neutral third-party claims administrator, which will be authorized to communicate with class members and make payments from the fund in accordance with the terms of the Settlement Agreement. The Company’s D&O liability insurers have agreed to and are expected to directly fund approximately $4 million of the settlement fund. The Company will directly fund the remaining approximately $15.5 million. As communicated on November 9, 2023, in conjunction with third quarter 2023 earnings results, the Company accrued for the underlying settlement amount as of September 30, 2023.
The foregoing summary is qualified in its entirety by reference to the Settlement Agreement, which is attached as Exhibit 99.1 to this report and incorporated herein by reference in its entirety.
There can be no assurance as to the ultimate outcome of the Class Action Litigation, including no assurance that the Settlement Agreement will be approved by the Court or that any revised settlement terms, if applicable, will be finalized by the parties and approved by the Court. The execution of the Settlement Agreement does not constitute an admission by the Company of any fault or liability and the Company does not admit fault or liability. If the settlement cannot be finalized by the parties or the Settlement Agreement is not approved by the Court, the Company will defend the Class Action Litigation vigorously and believes there are meritorious defenses and legal standards that must be met for, among other things, success on the merits. If the parties are unable to finalize the settlement, the Class Action Litigation could have a material adverse effect on the Company’s financial condition, results of operations and cash flows.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number |
Description | |
| 99.1 | Stipulation and Agreement of Settlement | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
| SPRUCE POWER HOLDING CORPORATION | ||
| Date: January 22, 2024 | By: |
/s/ Jonathan Norling |
| Name: | Jonathan Norling | |
| Title: | General Counsel | |
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