A pair of Ability Inc. investors asked a New York federal court Wednesday to sign off on a $3 million cash deal resolving a consolidated securities suit accusing the Israeli government communications contractor of making misleading financial statements surrounding a merger.
Investors Ametren LP and Theodore Zwicker requested preliminary approval of a settlement resolving their proposed class action alleging Ability painted an inaccurately rosy picture of the company’s financial state leading up to and after securing approval for its 2015 merger with Cambridge Capital Acquisition Corp. and a subsidiary, leading to a dramatic drop in stock price when the truth came out.
The deal is an excellent result for the proposed settlement class of people who, before May 2, 2016, bought Ability common stock pursuant to a late 2015 registration statement detailing the merger, the investors asserted. While the shareholders maintain that their claims were meritorious, they explained that Ability’s shaky financial state presented real ability-to-pay concerns should the litigation continue.
The shareholders are represented by Cohen Milstein Sellers & Toll PLLC and Glancy Prongay & Murray LLP.
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