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Chinese e-commerce company Alibaba, whose American Depository Shares (ADS) trade on the NYSE, has agreed to settle a long-running securities class action lawsuit in which the company was alleged to have misrepresented its exclusivity practices and certain aspects of the planned but withdrawn IPO of its financial affiliate, Ant Group. The company has agreed to pay $433.5 million to settle the lawsuit. The settlement is subject to court approval. As discussed below, this settlement has several interesting features.Continue Reading Alibaba Settles Securities Suit Over Exclusivity Practices and Ant Group’s Scuttled IPO for $433.5 Million

When I heard that moves by Chinese financial regulators had forced the Shangahi securities market to suspend Ant Group’s massive planned IPO, my first thought was that, if the offering had been planned for the U.S. the called halt to the offering might well give rise to a “failure to launch” claim. However, since Ant Group’s IPO was planned for the Shanghai and Hong Kong exchanges, the possibility of a claim seemed remote. As it has turned out, however, a failure to launch claim has been filed in the U.S. after all, with the added twist that the corporate defendant in the lawsuit is not Ant Group itself, but instead it is Alibaba, the U.S.-listed Chinese Internet commerce company that owns 33% of Ant Group’s equity interest. As discussed below, the new lawsuit against Alibaba has a number of interesting features.
Continue Reading Ant Group’s Scrubbed IPO Triggers U.S. Failure to Launch Claim Against Alibaba