COURT APPROVES $300 MILLION SETTLEMENT OF RENREN DERIVATIVE LITIGATION – ONE OF LARGEST DERIVATIVE RECOVERIES IN HISTORY
On June 9, 2022, the New York State Supreme Court granted approval of a direct pay cash settlement totaling at least $300 million, resolving the In re Renren, Inc. Derivative Litigation – one of the largest cash settlements of a derivative action in history. (The aggregate cash payment to Renren’s minority shareholders and ADS holders may exceed $300 million depending on the final determination of the number of shares and ADSs held by non-Defendants). The action alleges a complex scheme by Renren insiders to take the company’s billion-dollar investment portfolio for themselves. Reid Collins & Tsai LLP, Lead Counsel for the derivative plaintiffs, originally announced the terms of the settlement in October 2021.
The precedent-setting case will have long term impacts for protecting investors from cross-border fraud and financial misconduct. In both trial court and on appeal, Reid Collins defeated attempts by the Defendants to dismiss the case and evade accountability, with the courts accepting Reid Collins’ arguments addressing novel issues on personal jurisdiction and standing. Facing significant legal challenges to acquire U.S. jurisdiction over multiple foreign defendants and establish derivative standing under Cayman law, these wins by the Reid Collins team have created new precedent to combat a growing problem in the financial sector – the difficulty in addressing fraud and wrongdoing by foreign companies (and related individual actors) publicly traded in the U.S.
Click here to view the press release describing the litigation and ruling.
The case and settlement have received significant media coverage:
— The New York Times – “Renren, SoFi and a $300 million settlement” (scroll down)
— Financial Times – “US-listed Chinese group Renren settles investor complaint for $300m”
— Reuters – “‘Facebook of China’ shareholders score $300 million in cross-border derivative deal”
— Bloomberg – “Renren Insiders Settle SoFi Stake Suit in $300 Million Deal”
— Law360 – “Renren Investors To Settle Derivative Claims With $300M Deal
— AmLaw Litigation Daily – “Litigators of the Week”
Prior results do not guarantee a similar outcome.