In a motion for preliminary approval of the deal, Block & Leviton told U.S. District Judge Haywood Gilliam of Oakland, California, that any money remaining in the settlement fund after distributions to class members would go to the National Women’s Law Center, which assists sexual harassment victims. Calling attention to issues of sexual violence, the firm said, “could have prevented some of the losses investors suffered in this case.”
That seemingly innocuous provision could have tanked the entire settlement.
On Monday, Gilliam issued an order calling for Lyft and class counsel either to designate a different charity with a more obvious connection to shareholders’ securities fraud allegations or to provide a better justification for why a donation to the women’s law center would satisfy the stringent test the 9th U.S. Circuit Court of Appeals has laid out for cy pres recipients. If the two sides continued to insist on directing leftover money to the women’s law center, Gilliam warned, “the court likely will deny preliminary approval.”
Source: Lyft investors keep deal on track after judge nixes charity picked for class leftovers | Reuters
